January 17, 2003
VIA EDGAR
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549-1004
RE: ATWOOD OCEANICS, INC. PROXY STATEMENT
Ladies and Gentlemen:
On behalf of Atwood Oceanics, Inc. (the "Company"), and pursuant to
Rule 14a-6(b) of Regulation 14A, transmittal herewith is the Definitive Proxy
Statement and form of Proxy Card, constituting all soliciting materials being
furnished to shareholders in connection with the upcoming Annual Meeting of
Stockholders of the Company. The Company anticipates that copies of the proxy
materials filed pursuant to Rule 14a-6(b) of Regulations 14A will be released to
stockholders on or about January 17, 2002.
In addition, on behalf of the Company we will forward via Federal
Express delivery not later than the date on which such report is first sent or
given to security holders seven (7) copies of the Company's Annual Report to
Shareholders which will accompany the Proxy Statement mailing to stockholders.
Thank you for your assistance.
Very truly yours,
ATWOOD OCEANICS, INC.
/s/James M. Holland
Senior Vice President
JMH/tlb
SCHEDULE 14A
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:
[] Preliminary proxy statement. []Confidential, for use of the
Commission only (as permitted by
Rule 14a-6(e)(2).
[X] Definitive proxy statement.
[] Definitive additional materials.
[] Soliciting material pursuant to 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 14a-6(i)(1) 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 (set forth the amount on which
the filing fee is calculated and state how it was determined: N/A
(4) Proposed maximum aggregate value of transaction: N/A
(5) Total fee paid: None
[] 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 identified 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
(4) Date filed: N/A
ATWOOD OCEANICS, INC.
15835 PARK TEN PLACE DRIVE
HOUSTON, TEXAS 77084
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Houston, Texas
January 17, 2003
To the Shareholders of
ATWOOD OCEANICS, INC.:
Notice is hereby given that, pursuant to the provisions of the Amended and
Restated 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, 2003, 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 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, 2002 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.
By Order of the Board of Directors
/s/JAMES M. HOLLAND, Secretary
ANNUAL MEETING OF SHAREHOLDERS
ATWOOD OCEANICS, INC.
---------------
PROXY STATEMENT
---------------
January 17, 2003
SECURITY HOLDERS ENTITLED TO VOTE
Holders of shares of common stock, par value $1.00 per share ("Common
Stock") of Atwood Oceanics, Inc., (hereinafter sometimes called the "Company")
of record at the close of business on December 31, 2002 will be entitled to vote
at the Annual Meeting of Shareholders to be held February 13, 2003 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 17, 2003.
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 owners 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, 2002, 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
13,845,051 shares of Common Stock of the Company outstanding.
The election as directors of the persons nominated in this proxy statement
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. 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, Attn: 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, 2002 (except as otherwise indicated).
The information set forth below, other than with respect to Helmerich & Payne
International Drilling Co. ("H&PIDC"), is based on materials furnished to the
Company in connection with Securities and Exchange Commission ("SEC") 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 Zacks Investment Research,
Inc. ("Zacks") 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.
Name and Address Shares Owned Percent
---------------- Beneficially of Class
------------ --------
Helmerich & Payne Intl. Drilling Co. (1) -------------------------------- 3,000,000 21.67%
Utica at 21st
Tulsa, Oklahoma 74114
Franklin Resources, Inc. (2)---------------------------------------------- 1,595,000 11.52%
Charles B. Johnson (2)
Rupert H. Johnson, Jr. (2)
Franklin Advisers, Inc. (2)
Franklin Advisory Services, LLC. (2)
Franklin Management, Inc. (2)
777 Mariners Island Blvd.
P.O. Box 7777
San Mateo, California 94403-7777
T. Rowe Price Associates, Inc. (3)---------------------------------------- 1,340,400 9.68%
100 E. Pratt Street
Baltimore, Maryland 21202
Artisan Partners LP (4)--------------------------------------------------- 716,100 5.17%
1000 North Water Street
Milwaukee, Wisconsin 53202
-------------------
(1) Walter H. Helmerich, III is Chairman of the Board of Directors, and
Hans Helmerich, son of Walter H. Helmerich, III, is President, Chief
Executive Officer and a director, of Helmerich & Payne, Inc. ("H & P").
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 H & P, which has one hundred percent (100%)
ownership of H&PIDC, which currently according to Form 5 filed by H & P
on or about October 10, 2003 owns of record and beneficially 3,000,000
shares of Common Stock of the Company. On September 6, 2002, H & P
assigned 1,359,752 shares of Common Stock of the Company to H&PIDC
which increased its current ownership to 3,000,000 shares. Messrs.
Walter H. Helmerich, III and Hans Helmerich have disclaimed beneficial
ownership of the Common Stock owned by H&PIDC.
(2) The information set forth above concerning shares of Common Stock
beneficially owned by Franklin Resources, Inc. ("FRI"), Charles B. Johnson
("CBJ"), Rupert H. Johnson, Jr. ("RHJ"), Franklin Advisers, Inc. ("FAI"),
Franklin Advisory Services, LLC ("FASL") and Franklin Private Client Group,
Inc. ("FPCG"), collectively referred to as Franklin Resources Group, was
obtained from a report dated December 30, 2002 prepared by Zacks for the
Company and Amendment No. 6 to Schedule 13G dated February 1, 2002, filed
with the SEC by FRI, CBJ, RHJ and FAI. According to the aforementioned
Schedule 13G, at the time of the filing, Charles and Rupert Johnson are
principal shareholders of the outstanding common stock of FRI. FAI, FASL
and FPCG are investment advisory subsidiaries of FRI. FRI, CBJ and RHJ have
no voting or dispositive power with respect to any shares of the Company's
Common Stock. At the time of the filing of the Schedule 13G, the Franklin
Resources Group beneficially owned 1,803,408 shares of the Company's Stock.
FAI has sole voting and dispositive power with respect to 1,469,892 shares
of the Company's Common Stock. FASL has sole voting power and sole
dispositive power with respect to 94,000 shares of the Company's Common
Stock. FPCG has no voting power and sole dispositive power with respect to
4,108 shares of the Company's Common Stock.
(3) The information set forth above concerning shares of Common Stock
beneficially owned by T. Rowe Price Associates, Inc. ("T. Rowe Price")
was obtained from a report dated December 30, 2002 prepared by Zacks
for the Company and Schedule 13G dated February 14, 2002 filed with the
SEC by T. Rowe Price. According to the Schedule 13G, T. Rowe Price has
sole voting power with respect to 327,150 shares and sole dispositive
power with respect to 1,174,050 shares of the Company's Common Stock.
The Company does not have any information on voting or dispositive
power with respect to 166,350 shares of the Company's Common Stock
acquired by T. Rowe Price subsequent to the filing Schedule 13G on
February 14, 2002. T. Rowe Price has disclaimed beneficial ownership
of the Company's Common Stock.
(4) The information set forth above concerning shares of Common Stock
beneficially owned by Artisans Partners LP ("Artisan") was obtained
from a report dated December 30, 2002 prepared by Zacks for the
Company. Based upon reports prepared by Zacks, Artisan did not become
a stockholder owning more than five percent (5%) of the outstanding
Common Stock of the Company until some time during the second half
of 2002. The Company has not received any material from Artisan in
connection with SEC filings and thus, does not have any information on
voting or dispositive power that Artisan may have with respect to any
shares of the Company's Common Stock.
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, 2002 by each of the directors,
by each of the 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
Executive Officer or Group Beneficially of Class
-------------------------- ------------ ---------
Robert W. Burgess 2,000 - (1)
George S. Dotson - 0.00%
Walter H. Helmerich, III (2) 0.00%
Hans Helmerich (2) 0.00%
William J. Morrissey 400 (1)
John R. Irwin 62,200 (3) (1)
James M. Holland 37,034 (4) (1)
Glen P. Kelley 41,550 (5) (1)
All directors and executive officers as a group (8 persons) 143,184 (6) (1)
------------
(1) Less than 1%.
(2) See Note (1) on page 3 for more information.
(3) Includes 62,000 shares which may be acquired upon the exercise of options.
(4) Includes 34,900 shares which may be acquired upon the exercise of options.
(5) Includes 41,250 shares which may be acquired upon the exercise of options.
(6) Includes 138,150 shares which may be acquired upon the exercise of options.
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, 2002 are indicated opposite his name.
Date of
First
Name Offices Held Election Age
----- ------------ -------- ---
John R. Irwin President and Chief March 57
Executive Officer 1993
James M. Holland Senior Vice President October 57
and Secretary 1988
Glen P. Kelley Vice President - October 54
Contracts and 1988
Administration
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.
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 the Company's Amended and Restated
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 Glen
P. Kelley) have advised that they will vote all shares represented by proxies
for the election of the six (6) 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 of Directors.
Mr. Walter H. Helmerich, III, who has served as a director continuously
since 1970, has advised of his intended retirement from the Company's Board of
Directors and will, thus, not stand for reelection to the Company's Board of
Directors at the February 13, 2003 shareholders meeting. Mr. Helmerich has
provided the Company over thirty years of outstanding leadership as a director.
Ms. Deborah A. Beck (currently serving as Executive Vice President - Planning
and Technology for Northwestern Mutual Life Insurance Company) has been
nominated for election as a director to replace Mr. Walter H. Helmerich, III, on
the Company's Board of Directors.
Present Served as
Position a Director
with the Continuously Term to
Nominees Company Since Extend to Age
--------- --------- ------------ ---------- ----
Deborah A. Beck --- N/A February 55
2004
Robert W. Burgess Director September February 61
1990 2004
George S. Dotson Director February February 62
1988 2004
Hans Helmerich Director February February 44
1989 2004
John R. Irwin Director, November February 57
President 1992 2004
and Chief
Executive
Officer
William J. Morrissey Director November February 75
1969 2004
At all times during the previous five (5) years, Ms. Beck has been employed
by the Northwestern Mutual Life Insurance Company in various executive
capacities including Executive Vice President - Planning and Technology, Senior
Vice President - Insurance Operations, Vice President - New Business, and Vice
President of Policy Benefits. Ms. Beck served in the legal department for six
(6) years, three (3) of which she served as Assistant General Counsel.
Northwestern Mutual is a leading direct provider of individual life insurance
and offers insurance products, investment products and advisory services. Ms.
Beck's current role as Executive Vice President - Planning and Technology of
Northwestern Mutual entails responsibility for strategic planning, merger and
acquisition activity, information technology and project management. Ms. Beck's
division has a budget of $290 million per year and she oversees the direction of
750 employees.
Until his retirement in 1999, Mr. Burgess served for over five (5) years as
Chief Financial Officer (Senior Vice President) for CIGNA Investment Division,
CIGNA Companies. CIGNA is a diversified financial services company with major
businesses in insurance, health care, pensions and investments.
At all times during the previous five (5) years, Mr. Dotson has served as
Vice President - Drilling of H&P and President of H&PIDC. H & P is a
energy-oriented company engaged in contract drilling. He serves as a director of
H&P, which as a result of its ownership of Common Stock of the Company through
its subsidiary H&PIDC, may be deemed an affiliate of the Company. He also serves
as a director of Varco International, Inc.
At all times during the previous five (5) years, Mr. Hans Helmerich has
served as the Chief Executive Officer as well as a director of H&P, which as a
result of its ownership of Common Stock of the Company through its subsidiary
H&PIDC, may be deemed an affiliate of the Company.
Mr. Irwin has been employed by the Company in various executive capacities
for the last twenty-four (24) years.
Mr. Morrissey served as director and Vice Chairman of the Board of
Directors of Marine Corporation until the end of 1987 when Marine Corporation
was acquired by Banc One Corporation, Columbus, Ohio. Mr. Morrissey is currently
retired.
The Company has standing Audit, Executive, Compensation, and Nominating
committees. The Audit Committee members are Messrs. Morrissey, Burgess and
Dotson. This Committee functions to review in general terms the Company's
accounting policies and audit procedures and to supervise internal accounting
controls. The Audit Committee held six (6) meetings during fiscal year 2002, of
which four (4) were telephone conferences. 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 of Directors. The Compensation Committee 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 year 2002, there were two (2) meetings of the
Compensation Committee. The Nominating Committee composed of Messrs. Dotson,
Hans Helmerich and Burgess is to assist the Board of Directors ("Board")
regarding the appropriate size and composition of the Board, as well as
monitoring and making recommendations regarding the Board's performance. The
Nominating Committee held one (1) meeting.
Four (4) meetings of the Board of Directors were held during fiscal year
2002, all of which were regularly scheduled meetings. Each director attended,
during the time of his membership, at least seventy-five (75%) percent of Board
of Director and Committee meetings to which he was assigned.
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.
EXECUTIVE COMPENSATION
In accordance with the 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 compensation program is administrated by the Compensation
Committee ("Committee") of the Board of Directors. The Committee is composed of
three (3) non-employee directors. Following review and approval by the
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 the Company's executive officers and to administer the
Company's stock option plans.
Compensation Policies for Executive Officers
The Company's executive compensation policies are designed to provide
competitive levels of compensation that integrate pay with the Company's
performance, recognize individual initiative and achievements, and assist the
Company in attracting and retaining qualified executives. The Committee relies
in large part on compensation studies for the determination of competitive
compensation. These studies include salary and bonus compensation data from
several competitor companies. Also, when the Committee contemplates the awarding
of stock options to its executives, it considers the nature and amount of stock
awards made by competitor companies to their executive officers. In order to
implement these objectives, the Company has developed a straightforward
compensation package consisting of salary, discretionary annual bonus, and
periodic awards of stock options. Each element of the compensation package
serves a particular purpose. Salary and bonus are primarily designed to reward
current and past performance. Base salaries are conservatively set to recognize
individual performance while attempting to generally approximate the median
level of base salaries among the Company's competitors. Annual bonuses to
executive officers are awarded based upon corporate performance criteria,
competitive considerations, and the Committee's subjective determination of
individual performance. Awards of stock options are primarily designed to tie a
portion of each executive's compensation to long-term future performance of the
Company. The Committee believes that stock ownership by management through
stock-based compensation arrangements is beneficial in aligning management's and
stockholders' interest. The value of these awards will increase or decrease
based upon the future price of the Company's stock.
In determining executive compensation for fiscal 2002, the Committee
considered the Company's overall historical performance and its future
objective, together with fiscal 2002 corporate performance. Shareholders equity
was significantly enhanced during fiscal years 1998, 1999, 2000, 2001 and 2002
due to Company's revenues, cash flows and net profit for the period being at
their highest levels in the Company's history. In recognition of the Company's
continued strong operating performance, the Company awarded bonuses (ranging
from $50,000 to $115,000) and granted salary increases to each of the Company's
executive officers of approximately five percent (5%) in December 2001.
During fiscal 2002, stock options were awarded to the executive officers
and other key employees. In making these stock options awards, the Committee
considered both individual performance and the amount of stock option awards
made by competitors.
Section 162(m) of the Internal Revenue Code provides that certain
compensation to certain executive officers in excess of $1 million annually will
not be deductible for federal income purposes. The compensation levels of the
Company's executive officers are below the $1 million threshold.
Compensation Paid to the Chief Executive Officer
Mr. Irwin's compensation is determined in the same manner as described for
the other executive officers. For fiscal 2002, Mr. Irwin earned a $115,000 bonus
and a five percent (5%) salary increase.
In addition, the Committee awarded Mr. Irwin stock options to purchase
25,000 shares of stock. The Committee based this award on its subjective
assessment of Mr. Irwin's performance as CEO.
SUBMITTED BY THE COMPENSATION COMMITTEE
Robert W. Burgess George S. Dotson Hans Helmerich
December 31, 2002
A. Notwithstanding SEC filings by the Company that have incorporated or
may incorporate by reference other SEC 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.
EXECUTIVE AGREEMENTS
The Company entered into Executive Agreements, on September 18, 2002, with
Messrs. Holland, Irwin and Kelley. The Executive Agreements address the terms of
executive employment and compensation in the event of a termination of
employment due to a change of control in the ownership of the Company. The
Executive Agreements state that a change in control occurs (a) in the event of
an acquisition or formal tender offer by any individual, entity or group of
beneficial ownership of twenty percent (20%) of (i)the then outstanding shares
of Common Stock of the Company or (ii) the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in the
election of directors (certain exceptions apply); b) sale of substantially all
of the Company assets; or (c) a change of the majority of the members of the
Board of Directors of the Company. In the event of a change of control, Messrs.
Holland and Kelley shall remain in the employee of the Company following such
change of control for one year and six months and Mr. Irwin shall remain in the
employ of the Company for two years and six months following such change in
control. During such employment terms, the executives shall receive base salary;
annual bonus; incentive, savings and retirement plan benefits; welfare plan
benefits; executive life insurance benefits; indemnification; expenses and
vacation commensurate with those benefits that the executives enjoyed prior to
the change in control. The Executive Agreements each have three (3) year terms.
Compensation Committee Interlocks and Insider Participation
No member of the Compensation Committee of the Board of Directors of the
Company was, during the 2001-2002 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, except that Messrs. Dotson and Hans
Helmerich are executive officers of H & P, with whom the Company is a joint
venture partner as more fully described in "Related Transactions" on page 14 and
which may be considered to be an affiliate based upon its ownership of Company
common stock.
During the Company's 2001-2002 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 Company, (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.
COMPENSATION TABLES
The SEC compensation disclosure rules require that various compensation
information be presented in various tables as set forth below.
SUMMARY COMPENSATION TABLE
Annual Compensation
Long Term
Compensation
(Awards)
---------
Securities
Fiscal Other Annual Underlying All Other
Name and Principal Position Year Salary Bonus Compensation Options Compensation (A)
--------------------------- ------ ------ ----- ------------ ----------- ----------------
$ $ $ (#) ($)
John R. Irwin 2002 337,002 115,000 --- 25,000 50,255
President and Chief 2001 321,246 85,000 --- 40,000 47,180
Executive Officer 2000 306,250 85,000 --- 15,000 33,552
James M. Holland 2002 194,088 50,000 --- 15,000 26,219
Senior Vice President 2001 185,196 40,000 --- 24,000 24,330
and Secretary 2000 176,376 40,000 --- 9,000 19,784
Glen P. Kelley 2002 182,040 50,000 --- 15,000 24,862
Vice President - Contracts 2001 171,036 40,000 --- 24,000 22,762
and Administration 2000 156,003 35,000 --- 8,000 17,390
---------------------------
(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 2002, 2001, and 2000 of $45,200, $42,125 and $30,625,
respectively; Company paid term life and insurance premiums ("TLIP")
for 2002, 2001, and 2000 of $ 5,055, $5,055 and $2,927, respectively;
(ii) (ii) Mr. Holland: Annual Company contributions to the DCP for 2002,
2001 and 2000 of $24,409, $22,520 and $17,638, respectively; Company
paid TLIP for 2002, 2001, and 2000 of $1,810, $1,810 and $2,146,
respectively ; and
(iii) (iii) Mr. Kelley: Annual Company contributions to the DCP for 2002,
2001, and 2000 of $23,204, $21,104 and $15,600, respectively; Company
paid TLIP for 2002, 2001, and 2000 of $1,658, $1,658 and $1,790,
respectively.
OPTION GRANTS TABLE
Individual Grants Made in Fiscal 2002
------------------------------------------------------------------
Potential Realizable Value
Number of at Assumed Annual
Securities Percentage of Rates of Stock Price
Underlying Total Options Appreciation for Option Term
Options Granted to ----------------------------
Granted Employees in Exercise Price Expiration
Name (A) (#) Fiscal Year ($/Share) Date 5% ($) 10% ($)
----- --------- ------------- -------------- ---------- ---------- --------
Irwin 25,000 (B) 15% 30.76 9/11/2012 483,500 1,225,000
Holland 15,000 (B) 9% 30.76 9/11/2012 290,100 735,000
Kelley 15,000 (B) 9% 30.76 9/11/2012 290,100 735,000
__________
-
(A) The options were granted for a term of ten (10) years, subject to
earlier termination in certain events related to termination of
employment. Twenty-five percent (25%) of such options become
exercisable at each of one (1) year, two (2) years, three (3) years
and four (4) 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 September 12, 2002 pursuant to the
Company's 2001 Stock Incentive Plan.
OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION VALUE TABLE
Number of
Securities
Underlying
Shares Acquired Unexercised Value of Unexercised
on Exercise during Value Options at In-the-Money Options
Name Fiscal 2002 Realized Sept. 30, 2002 at Sept. 30, 2002 (A)
---- ------------------ --------- --------------- -----------------------
(#) ($) (#) ($)
Exercisable/ Exercisable/
Unexercisable Unexercisable
--------------- ---------------
Irwin --- --- 50,750/83,750 281,550/44,060
Holland --- --- 27,900/50,500 146,870/26,440
Kelley --- --- 35,000/49,000 221,180/23,500
-------------
(A) Calculated based upon the September 30, 2002 fair market value of
$29.25 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.
AUDIT COMMITTEE REPORT
In accordance with the SEC audit committees communication requirements
under Item 306 of Regulation S-K, the following information is presented to
inform shareholders of the Audit Committees oversight with respect to financial
reporting.
AUDIT COMMITTEE CHARTER
The members of the Audit Committee are governed by a Charter duly adopted
by the Board of Directors, which requires their independence from management of
the Company or their freedom from any other relationship which would interfere
with their independent judgment. George Dotson is not "independent" as defined
by Section 303.01 (B)(2)(a) and (3) of the New York Stock Exchange's listing
standards due to his key employment positions with H&P and H&PIDC, which may be
deemed to be affiliates of the Company. However, the Board of Directors believes
that Mr. Dotson's membership on the Audit Committee is in the best interests in
the Company due to his expertise, experience, and tenure as a director of the
Company. A copy of the Audit Committee Charter is incorporated herein by
reference to the Company's definitive Proxy Statement for the Annual Meeting of
Shareholders held on February 8, 2001 filed with the SEC on January 12, 2001 on
form DEF14A.
Report of the Audit Committee of the Board of Directors of ATWOOD OCEANICS, INC.
To: The Board of Directors
We have reviewed and discussed with management the Company's audited
financial statements as of and for the year ended September 30, 2002.
We have discussed with the independent auditors the matters required to be
discussed by Statement on Auditing Standards No. 61, Communication with Audit
Committees, as amended, by the Auditing Standards Board of the American
Institute of Certified Public Accountants.
We have received and reviewed the written disclosures and the letter from
the independent auditors required by Independence Standard No. 1, Independence
Discussions with Audit Committees, as amended, by the Independence Standards
Board, and have discussed with the auditors the auditors' independence.
Based on the reviews and discussions referred to above, we recommend to the
Board of Directors that the financial statements referred to above be included
in the Company's Annual Report on Form 10-K for the year ended September 30,
2002.
Audit Committee
William J. Morrissey, Chairman
Robert W. Burgess, Member
George S. Dotson, Member
December 31, 2002
FISCAL 2002 AUDIT FIRM FEE SUMMARY
During fiscal year 2002, PricewaterhouseCoopers LLP provided service in the
following categories and amounts.
Audit Fees $ 71,000
Audit-Related Fees $ ---
Financial Information Systems Design
And Implementation Fees $ ---
All Other Fees $ ---
ATWOOD OCEANICS, INC. COMMON STOCK PRICE PERFORMANCE GRAPH
COMPARISON OF FIVE (5) YEAR CUMULATIVE TOTAL RETURNS* AMONG ATWOOD
OCEANICS, INC., AND THE CENTER FOR RESEARCH IN SECURITY PRICES ("CRSP") INDEX
FOR THE NYSE/AMEX/NASDAQ STOCK MARKETS, AND THE PEER GROUP OF DRILLING
COMPANIES.
GRAPH
Index Description 9/30/97 9/30/98 9/30/99 9/29/00 9/28/01 09/30/02
------- ------- ------- ------- ------- --------
ATWOOD OCEANICS, INC. 100.0 37.0 54.3 74.0 46.2 51.9
CRSP Index for
NYSE/AMEX/NASDAQ
Stock Markets (U.S.
Companies) 100.0 103.5 131.7 155.7 110.6 91.5
Self-Determined Peer Group 100.0 43.5 56.0 105.3 49.4 51.3
Constituents of the Self-Determined Peer Group (weighted according to
market capitalization):
Diamond Offshore Drilling Inc. GlobalSanteFe Corporation Rowan Companies, Inc.
Ensco International Inc. Noble Drilling Corp. Transocean Sedco Forex Inc.
* Assumes $100 invested on September 30, 1997; Total returns assumes
dividend reinvested; Fiscal year ending September 30 of each year.
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 (10%) of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the SEC. 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, 2001 through September 30, 2002, all filing requirements
applicable to its officers, directors and greater than ten-percent (10%)
beneficial owners were complied with, except that Messrs. Irwin, Holland and
Kelley inadvertently failed to timely file one (1) monthly report covering
derivative securities on a Form 4, but did report same in a subsequent Form 5.
RELATED TRANSACTIONS
Upon being awarded a term contract in August 1994, the Company entered into
a joint venture agreement with H&P (which through its wholly-owned subsidiary,
H&PIDC, owns twenty-one and 67/100 percent (21.67%) of the Company's Common
Stock and may be deemed to be an affiliate of the Company) for the design,
construction and operation of RIG-200, a platform rig. The rig has not worked
since June 1999 and was retired during 2002. The Company and H&P each have a
fifty percent (50%) interest in the joint venture. The Company invested
approximately $12 million in this project. Three (3) of the Company's directors
at December 31, 2002, namely Messrs. 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 fiscal 2002 an annual retainer fee of $10,000 plus
$2,500 per meeting for attendance at regular Board meetings, and $250 per
meeting for attendance at meetings of the audit committee if held on a day other
than a regular Board meeting. Each non-employee director of the Company was also
awarded 2,000 nonqualified stock options in March 2002 pursuant to the Company's
1996 Incentive Equity Plan. These options have an exercise price of $42.71, with
a term of ten years. Twenty-five percent (25%) of such options become
exercisable at the end of two (2) years, three (3) years, four (4) years and
five (5) years, respectively from the date of grant.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
From 1970 to May 14, 2002, the independent public accounting firm Arthur
Andersen LLP served as the Company's auditor. On May 14, 2002, the Company
dismissed Arthur Andersen LLP as its independent public accountants and
appointed PricewaterhouseCoopers LLP ("PWC") as its new independent accountants.
During the years ended September 30, 2001 and 2000, and the subsequent interim
period through May 14, 2002, there were no disagreements between the Company and
Arthur Andersen LLP on any matter of accounting principles or practices,
financial statement disclosures, or auditor scope or procedures. PWC audited the
Company's financial statements for the year ended September 30, 2002 and will
have representatives present at the shareholders meeting and will have the
opportunity to make a statement if they so desire and will be available to
respond to appropriate questions.
SHAREHOLDER PROPOSALS
Proposals of shareholders of the Company intended to be presented for
consideration at the Annual Meeting of Shareholders of the Company to be held in
February, 2004 must be received by the Company no later than September 18, 2003
and must comply with the requirements of the proxy rules promulgated by the
Securities and Exchange Commission in order to be included in the proxy
statement and form of proxy related to that meeting. If notice of any
shareholder proposal not eligible for inclusion in the Company's proxy statement
and form of proxy is given to the Company after November 30, 2003, then proxy
holders will be allowed to use their discretionary voting authority on such
shareholder proposal when the matter is raised at such 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 before the meeting, the persons named in
the enclosed form of proxy will vote the proxies under discretionary authority
therein 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 10-K including financial
statements and financial statement schedules for the fiscal year ended September
30, 2002 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 17, 2003
PROXY ATWOOD OCEANICS, INC.
ANNUAL MEETING OF SHAREHOLDERS
FEBRUARY 13, 2003
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints James M. Holland and Glen P. Kelley, or
either of them as Proxies, each with the power to appoint a substitute, and
hereby authorizes them to represent and to vote, as designated below, all the
shares of common stock, par value $1.00 per share, held of record by the
undersigned as of the close of business on December 31, 2002, at the Annual
Meeting of Shareholders to be held on February 13, 2003 or any adjournment
thereof:
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY IN THE ENVELOPE
PROVIDED
1. ELECTION OF DIRECTORS:
FOR all nominees listed
(except as marked to the contrary) WITHHOLD authority to vote
for all nominees listed
Nominees:
DEBORAH A. BECK GEORGE S. DOTSON JOHN R. IRWIN
ROBERT W. BURGESS HANS HELMERICH WILLIAM J. MORRISSEY
(INSTRUCTION: To withhold authority to vote for one or more individual
nominees, write the nominee's name(s) in the line provided below.)
------------------------------------------------------------------------------
2. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
(see reverse side)
This Proxy, when properly executed, will be voted in the manner directed
herein by the undersigned shareholder. If no direction is made the Proxy will be
voted FOR the election of all Directors.
Please sign exactly as name appears hereon.
________________________, 2003 _________________________________________
DATED SIGNATURE
_________________________________________
SIGNATURE IF JOINTLY HELD
NOTE: When shares are held
by joint tenants, both should sign. When
signing as attorney, as executor,
administrator, trustee, or guardian,
please give full title as such. If a
corporation, please sign in full corporate
name by President or other authorized
officer. If a partnership, please sign in
partnership name by authorized person.
Please note any change in your address
alongside the address as it appears in
the proxy.
PLEASE MARK IN BLUE OR BLACK INK, SIGN, DATE AND RETURN THE PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE.