JOHN R. IRWIN
 
                              EXECUTIVE AGREEMENT
 
      THIS EXECUTIVE AGREEMENT (the "AGREEMENT") is entered into as of the 8
day of May, 1996 by and between ATWOOD OCEANICS, INC., a Texas corporation (the
"COMPANY"), and JOHN R. IRWIN (the "EXECUTIVE").
 
                             W I T N E S S E T H:
 
      WHEREAS, it is in the best interests of the Company and its shareholders
to assure that the Company will have the continued dedication of the Executive,
notwithstanding the possibility, threat or occurrence of a Change of Control (as
defined in Section 2 below) of the Company; and
 
      WHEREAS, it is imperative to diminish the inevitable distraction of the
Executive by virtue of the personal uncertainties and risks created by a pending
or threatened Change of Control and to encourage the Executive's full attention
and dedication to the Company currently and in the event of any threatened or
pending Change of Control; and
 
      WHEREAS, it is imperative to provide the Executive with compensation and
benefits arrangements upon a Change of Control which ensure that the
compensation and benefits expectations of the Executive will be satisfied and
which are competitive with those of other corporations.
 
      NOW, THEREFORE, in order to accomplish these objectives, and in
consideration of the mutual covenants and agreements set forth herein and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties, intending to be legally bound, agree as follows:
 
      1. CERTAIN DEFINITIONS. The following terms shall have the indicated
meanings:
 
            (a) The "CHANGE OF CONTROL DATE" shall mean the first date during
the Change of Control Period (as defined in Section 1(b)) on which a Change of
Control occurs. Notwithstanding anything in this Agreement to the contrary, if a
Change of Control occurs and if the Executive's employment with the Company is
terminated prior to the date on which the Change of Control occurs, and if it is
reasonably demonstrated by the Executive that such termination of employment (i)
was at the request of a third party who has taken steps reasonably calculated to
effect the Change of Control or (ii) otherwise arose in connection with or
anticipation of the Change of Control, then for all purposes of this Agreement
the "CHANGE OF CONTROL DATE" shall mean the date immediately prior to the date
of such termination of employment.
 
            (b) The "CHANGE OF CONTROL PERIOD" shall mean the period commencing
on the date hereof and ending on December 31, 1996.
 
      2. CHANGE OF CONTROL. For the purposes of this Agreement, a "CHANGE OF
CONTROL" shall mean the occurrence of any one or more of the following:
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            (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 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; provided, however, that the following acquisitions shall not
constitute a Change of Control: (i) any acquisition directly from the Company;
(ii) any acquisition by the Company; (iii) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company; or
 
            (b) The Company 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
(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 the
Company'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.
 
      3. POST-CHANGE OF CONTROL EMPLOYMENT PERIOD. The Company hereby agrees to
continue the Executive in its employ, and the Executive hereby agrees to remain
in the employ of the Company, in accordance with the terms and provisions of
this Agreement, for the period commencing on the Change of Control Date and
ending on the expiration of two years and six months thereafter (the
"POST-CHANGE OF CONTROL EMPLOYMENT PERIOD").
 
      4. TERMS OF EMPLOYMENT. The following terms shall govern the Executive's
employment during the Post-Change of Control Employment Period:
 
            (a)   POSITION AND DUTIES.
 
                  (i) During the Post-Change of Control Employment Period, the
      Executive shall be employed in a bona fide executive position with
      corresponding authority, duties and responsibilities, and the Executive's
      services shall be performed at the location where the Executive was
      employed immediately preceding the Change of Control Date or any office
      which is the headquarters of the Company and is within the Greater Houston
      Statistical Metropolitan Area.
 
                  (ii) During the Post-Change of Control Employment Period, and
      excluding any periods of vacation and sick leave to which the Executive is
      entitled, the Executive agrees to devote reasonable attention and time
      during normal business hours to 
 
                                      -2-
<PAGE>
      the business and affairs of the Company and, to the extent necessary to
      discharge the responsibilities assigned to the Executive hereunder, to use
      the Executive's reasonable best efforts to perform faithfully and
      efficiently such responsibilities. During the Post- Change of Control
      Employment Period, it shall not be a violation of this Agreement for the
      Executive to serve on corporate, civic or charitable boards or committees,
      deliver lectures, fulfill speaking engagements, teach at educational
      institutions, and manage personal investments, so long as such activities
      do not significantly interfere with the performance of the Executive's
      responsibilities as an employee of the Company in accordance with this
      Agreement. It is expressly understood and agreed that to the extent that
      any such activities have been conducted by the Executive prior to the
      Change of Control Date, the continued conduct of such activities (or the
      conduct of activities similar in nature and scope thereto) subsequent to
      the Change of Control Date shall not thereafter be deemed to interfere
      with the performance of the Executive's responsibilities to the Company.
 
            (b) COMPENSATION. During the Post-Change of Control Employment
Period, and prior to the termination of the Executive's employment as described
in Section 5 hereof, the Executive shall be entitled to the following items of
compensation:
 
                  (i) BASE SALARY. During the Post-Change of Control Employment
      Period, the Executive shall receive an annual base salary ("ANNUAL BASE
      SALARY"), which shall be paid in equal installments on a semi-monthly
      basis, at least equal to twelve times the highest monthly base salary paid
      or payable to the Executive by the Company and its affiliated companies in
      respect of the twelve-month period immediately preceding the month in
      which the Change of Control Date occurs. Any discretionary increase in
      Annual Base Salary during the Post-Change of Control Employment Period
      shall not serve to limit or reduce any other obligation to the Executive
      under this Agreement. Annual Base Salary shall not be reduced after any
      such increase, and the term "ANNUAL BASE SALARY" as utilized in this
      Agreement shall refer to Annual Base Salary as so increased. As used in
      this Agreement, the term "AFFILIATED COMPANIES" shall include any company
      controlled by, controlling or under common control with the Company.
 
                  (ii) INCENTIVE, SAVINGS AND RETIREMENT PLANS. During the
      Post-Change of Control Employment Period, the Executive shall be entitled
      to participate in all incentive, savings and retirement plans, practices,
      policies and programs applicable generally to other peer executives of the
      Company and its affiliated companies, including without limitation, the
      Atwood Oceanics, Inc. 1981 Incentive Stock Option Plan, as may be amended
      from time to time (the "1981 INCENTIVE STOCK OPTION PLAN"), the Atwood
      Oceanics, Inc. 1990 Stock Option Plan, as may be amended from time to time
      (the "1990 STOCK OPTION PLAN"), the Atwood Oceanics, Inc. 401(k) Savings
      Plan, as amended and as may be further amended from time to time (the
      "401(K) PLAN"),and subject to Section 7 hereof, the Atwood Oceanics, Inc.
      Retention Plan for Certain Salaried Employees, as may be amended from time
      to time (the "RETENTION PLAN"), but in no event shall such plans,
      practices, policies and programs provide the Executive with incentive
      opportunities (measured with respect to both regular and special incentive
      opportunities, to the extent, if any, that such distinction is
      applicable), savings opportunities and retirement benefit
 
                                     -3-
<PAGE>
      opportunities, in each case, less favorable, in the aggregate, than the
      most favorable of those provided by the Company and its affiliated
      companies for the Executive under such plans, practices, policies and
      programs as in effect at any time during the 90-day period immediately
      preceding the Change of Control Date or, if more favorable to the
      Executive, those provided generally at any time after the Change of
      Control Date to other peer executives of the Company and its affiliated
      companies.
 
                  (iii) WELFARE BENEFIT PLANS. During the Post-Change of Control
      Employment Period, the Executive and/or the Executive's family, as the
      case may be, shall be eligible for participation in and shall receive all
      benefits under welfare benefit plans, practices, policies and programs
      provided by the Company and its affiliated companies (including, without
      limitation, medical, supplemental health, prescription, dental,
      disability, salary continuance, employee life, group life, accidental
      death and travel accident insurance plans and programs) to the extent
      applicable generally to other peer executives of the Company and its
      affiliated companies, but in no event shall such plans, practices,
      policies and programs provide the Executive with benefits which are less
      favorable, in the aggregate, than the most favorable of such plans,
      practices, policies and programs in effect for the Executive at any time
      during the 90-day period immediately preceding the Change of Control Date
      or, if more favorable to the Executive, those provided generally at any
      time after the Change of Control Date to other peer executives of the
      Company and its affiliated companies.
 
                  (iv) EXECUTIVE LIFE INSURANCE PLAN. During the Post-Change of
      Control Employment Period, the Company shall continue to maintain the
      Atwood Oceanics, Inc. Executive Life Insurance Plan, with its associated
      Salary Continuation Agreement, as may be amended from time to time, or pay
      to the Executive a lump sum representing the value of all benefits under
      such plan.
 
                  (v) INDEMNIFICATION ARRANGEMENTS. During the Post-Change of
      Control Employment Period, those certain Indemnification Agreements
      entered into between the Company and certain of its Executives shall
      remain in full force and effect and the Executive shall remain entitled to
      all of the benefits and protections afforded thereby.
 
                  (vi) EXPENSES. During the Post-Change of Control Employment
      Period, the Executive shall be entitled to receive prompt reimbursement
      for all reasonable employment expenses incurred by the Executive in
      accordance with the most favorable policies, practices and procedures of
      the Company and its affiliated companies in effect for the Executive at
      any time during the 90-day period immediately preceding the Change of
      Control Date or, if more favorable to the Executive, as in effect
      generally at any time thereafter with respect to other peer executives of
      the Company and its affiliated companies.
 
                  (vii) VACATION. During the Post-Change of Control Employment
      Period, the Executive shall be entitled to paid vacation in accordance
      with the most favorable plans, policies, programs and practices of the
      Company and its affiliated 
                                     -4-
<PAGE>
      companies as in effect for the Executive at any time during the 90-day
      period immediately preceding the Change of Control Date or, if more
      favorable to the Executive, as in effect generally at any time thereafter
      with respect to other peer executives of the Company and its affiliated
      companies.
 
      5.    TERMINATION OF EMPLOYMENT.
 
            (a) DEATH OR DISABILITY. The Executive's employment shall terminate
automatically upon the Executive's death during the Post-Change of Control
Employment Period. If the Company determines in good faith that the Disability
of the Executive has occurred during the Post-Change of Control Employment
Period (pursuant to the definition of Disability set forth below), it may give
to the Executive written notice in accordance with Section 13(b) hereof of its
intention to terminate the Executive's employment. In such event, the
Executive's employment with the Company shall terminate effective on the 30th
day after receipt of such notice by the Executive (the "DISABILITY CHANGE OF
CONTROL DATE"), provided that, within the 30 days after such receipt, the
Executive shall not have returned to full-time performance of the Executive's
duties. For purposes of this Agreement, "DISABILITY" shall mean the absence of
the Executive from the Executive's duties with the Company on a full-time basis
for 180 consecutive days as a result of incapacity due to mental or physical
illness which is determined to be total and permanent by a physician selected by
the Company or its insurers and acceptable to the Executive or the Executive's
legal representative (such agreement as to acceptability not to be withheld
unreasonably).
 
            (b) TERMINATION BY THE COMPANY FOR CAUSE. The Company may terminate
the Executive's employment during the Post-Change of Control Employment Period
for Cause. For purposes of this Agreement, "CAUSE" shall mean (i) a material
breach by the Executive of the Executive's obligations under Section 4(a) (other
than as a result of incapacity due to physical or mental illness) which is
demonstrably willful and deliberate on the Executive's part, which is committed
in bad faith or without reasonable belief that such breach is in the best
interests of the Company and which is not remedied in a reasonable period of
time after receipt of written notice from the Company specifying such breach, or
(ii) the conviction of the Executive of a felony involving moral turpitude.
 
            (c) VOLUNTARY TERMINATION BY EXECUTIVE FOR GOOD REASON. The
Executive's employment may be terminated during the Post-Change of Control
Employment Period by the Executive for Good Reason. For purposes of this
Agreement, "GOOD REASON" shall mean:
 
                  (i) the assignment to the Executive of any duties inconsistent
      in any respect with the Executive's position (including status, offices,
      titles and reporting requirements), authority, duties or responsibilities
      as contemplated by Section 4(a) or any other action by the Company which
      results in a diminution in such position, authority, duties or
      responsibilities, excluding for this purpose an isolated, insubstantial
      and inadvertent action not taken in bad faith and which is remedied by the
      Company promptly after receipt of notice thereof given by the Executive;
 
                                     -5-
<PAGE>
                  (ii) any failure by the Company to comply with any of the
      provisions of Section 4(b), other than an isolated, insubstantial and
      inadvertent failure not occurring in bad faith and which is remedied by
      the Company promptly after receipt of notice thereof given by the
      Executive;
 
                  (iii) the Company's requiring the Executive to be based at any
      office or location other than that described in Section 4(a)(i) hereof;
 
                  (iv) any purported termination by the Company of the
      Executive's employment otherwise than as expressly permitted by this
      Agreement; or
 
                  (v) any failure by the Company to comply with and satisfy
      Section 12(c) hereof, provided that such successor has received at least
      ten days, prior written notice from the Company or the Executive of the
      requirements of Section 12(c) hereof.
 
      For purposes of this Section 5(c), any good faith determination of "GOOD
REASON" made by the Executive shall be conclusive.
 
            (d) NOTICE OF TERMINATION. Any termination by the Company for Cause,
or by the Executive for Good Reason, shall be communicated by Notice of
Termination to the other party hereto given in accordance with Section 13(b).
For purposes of this Agreement, a "NOTICE OF TERMINATION" means a written notice
which (i) indicates the specific termination provision in this Agreement relied
upon, (ii) to the extent applicable, sets forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated, and (iii) if the Date of
Termination (as defined below) is other than the date of receipt of such notice,
specifies the termination date (which date shall be not more than 15 days after
the giving of such notice). The failure by the Executive or the Company to set
forth in the Notice of Termination any fact or circumstance which contributes to
a showing of Good Reason or Cause shall not waive any right of the Executive or
the Company hereunder or preclude the Executive or the Company from asserting
such fact or circumstance in enforcing the Executive's or the Company's rights
hereunder.
 
            (e) DATE OF TERMINATION. "DATE OF TERMINATION" means (i) if the
Executive's employment is terminated by the Company for Cause, or by the
Executive for Good Reason, the date of receipt of the Notice of Termination or
any later date specified therein, as the case may be, (ii) if the Executive's
employment is terminated by the Company other than for Cause or Disability, the
Date of Termination shall be the date on which the Company notifies the
Executive of such termination, and (iii) if the Executive's employment is
terminated by reason of death or Disability, the Date of Termination shall be
the date of death of the Executive or the Disability Change of Control Date, as
the case may be.
 
      6.    OBLIGATIONS OF THE COMPANY UPON TERMINATION.
 
            (a) TERMINATION FOR GOOD REASON OR OTHER THAN FOR CAUSE, DEATH OR
DISABILITY. If, during the Post-Change of Control Employment Period, the Company
shall 
 
                                     -6-
<PAGE>
terminate the Executive's employment other than for Cause or Disability or
the Executive shall terminate employment for Good Reason:
 
                  (i) the Company shall pay to the Executive in a lump sum in
      cash within 30 days after the Date of Termination the aggregate of the
      following amounts:
 
                        A. the sum of (1) the Executive's Annual Base Salary
            through the Date of Termination to the extent not theretofore paid,
            (2) any compensation previously deferred by the Executive (together
            with any accrued interest or earnings thereon) and (3) any accrued
            vacation pay, in each case to the extent not theretofore paid (the
            sum of the amounts described in clauses (1), (2), and (3) shall be
            hereinafter referred to as the "ACCRUED OBLIGATIONS"); and
 
                        B. the amount (such amount shall be hereinafter referred
            to as the "SEVERANCE AMOUNT") equal to the Executive's Annual Base
            Salary, calculated from the Date of Termination through the
            remainder of the Post-Change of Control Employment Period; PROVIDED,
            HOWEVER, that such amount shall be reduced by the present value
            (determined as provided in Section 280G(d)(4) of the Internal
            Revenue Code of 1986, as amended (the "CODE")) of any other amount
            of severance relating to salary or bonus continuation, if any, to be
            received by the Executive upon termination of employment of the
            Executive under any severance plan, policy or arrangement of the
            Company; and
 
                  (ii) any or all Stock Options awarded to the Executive under
      any plan not previously exercisable and vested shall become fully
      exercisable and vested; and
 
                  (iii) for the remainder of the Post-Change of Control
      Employment Period, or such longer period as any plan, program, practice or
      policy may provide, the Company shall continue benefits to the Executive
      and/or the Executive's family at least equal to those which would have
      been provided to them in accordance with the plans, programs, practices
      and policies described in Section 4(b)(iv) if the Executive's employment
      had not been terminated in accordance with the most favorable plans,
      practices, programs or policies of the Company and its affiliated
      companies as in effect and applicable generally to other peer executives
      and their families during the 90-day period immediately preceding the
      Change of Control Date or, if more favorable to the Executive, as in
      effect generally at any time thereafter with respect to other peer
      executives of the Company and its affiliated companies and their families;
      PROVIDED, HOWEVER, that if the Executive becomes reemployed with another
      employer and is eligible to receive medical or other welfare benefits
      under another employer-provided plan, the medical and other welfare
      benefits described herein shall be secondary to those provided under such
      other plan during such applicable period of eligibility; and
 
                  (iv) subject to the provisions of Section 7, to the extent not
      theretofore paid or provided, the Company shall timely pay or provide to
      the Executive and/or the Executive's family any other amounts or benefits
      required to be paid or provided or which 
 
                                       -7-
<PAGE>
      the Executive and/or the Executive's family is eligible to receive
      pursuant to this Agreement and under any plan, program, policy or practice
      of or contract or agreement with the Company and its affiliated companies
      as in effect and applicable generally to other peer executives and their
      families during the 90-day period immediately preceding the Change of
      Control Date or, if more favorable to the Executive, as in effect
      generally thereafter with respect to other peer executives of the Company
      and its affiliated companies and their families (such other amounts and
      benefits shall be hereinafter referred to as the "OTHER BENEFITS").
 
            (b) DEATH. If the Executive's employment is terminated by reason of
the Executive's death during the Post-Change of Control Employment Period, this
Agreement shall terminate without further obligations to the Executive's legal
representatives under this Agreement, other than for (i) payment of Accrued
Obligations (which shall be paid to the Executive's estate or beneficiary, as
applicable, in a lump sum in cash within 30 days of the Date of Termination) and
(ii) the timely payment or provision of any and all Other Benefits, which under
their terms are available in the event of death.
 
            (c) DISABILITY. If the Executive's employment is terminated by
reason of the Executive's Disability during the Post-Change of Control
Employment Period, this Agreement shall terminate without further obligations to
the Executive, other than for (i) payment of Accrued Obligations (which shall be
paid to the Executive in a lump sum in cash within 30 days of the Date of
Termination) and (ii) the timely payment or provision of any and all Other
Benefits, which under their terms are available in the event of a Disability.
 
            (d) CAUSE; OTHER THAN FOR GOOD REASON. If the Executive's employment
shall be terminated for Cause during the Post-Change of Control Employment
Period, this Agreement shall terminate without further obligations to the
Executive other than the obligation to pay to the Executive Annual Base Salary
through the Date of Termination plus the amount of any compensation previously
deferred by the Executive, in each case to the extent theretofore unpaid. If the
Executive terminates employment during the Post-Change of Control Employment
Period, excluding a termination for Good Reason, this Agreement shall terminate
without further obligations to the Executive, other than for payment of Accrued
Obligations and the timely payment or provision of Other Benefits. In such case,
all Accrued Obligations shall be paid to the Executive in a lump sum in cash
within 30 days of the Date of Termination.
 
      7. WAIVER OF RIGHTS UNDER RETENTION PLAN AND FOR OTHER SEVERANCE. The
Executive hereby agrees any and all benefits or payments arising out of or
relating to the Retention Plan, if any, or any plan, program, policy or practice
of or contract or agreement with the Company and its affiliated companies
relating to the severance of employment ("OTHER SEVERANCE"), shall be fully
offset against any benefits or payments due and owing hereunder.
 
      8. NON-EXCLUSIVITY OF RIGHTS. At any time prior to a Change of Control,
and except as provided in Sections 6(a)(ii), 6(b) and 6(c), nothing in this
Agreement shall prevent or limit the Executive's continuing or future
participation in any plan, program, policy or practice provided after such
Change of Control by the Company, its affiliated companies, or any successor
thereof, 
 
                                     -8-
<PAGE>
and for which the Executive may qualify, nor shall anything herein
limit or otherwise affect such rights as the Executive may have under any
contract or agreement with the Company or any of its affiliated companies.
Amounts which are vested benefits or which the Executive is otherwise entitled
to receive under any plan, policy, practice or program of or any contract or
agreement with the Company or any of its affiliated companies at or subsequent
to the Date of Termination shall be payable in accordance with such plan,
policy, practice or program or contract or agreement except as explicitly
modified by this Agreement.
 
      9.    FULL SETTLEMENT; RESOLUTION OF DISPUTES.
 
            (a) The Company's obligation to make the payments provided for in
this Agreement and otherwise to perform its obligations hereunder shall not be
affected by any set-off, counterclaim, recoupment, defense or other claim, right
or action which the Company may have against the Executive or others. In no
event shall the Executive be obligated to seek other employment or take any
other action by way of mitigation of the amounts payable to the Executive under
any of the provisions of this Agreement and, except as provided in Section
6(a)(ii), such amounts shall not be reduced whether or not the Executive obtains
other employment. The Company agrees to pay promptly as incurred, to the full
extent permitted by law, all legal fees and expenses which the Executive may
reasonably incur as a result of any contest (regardless of the outcome thereof)
by the Company, the Executive or others of the validity or enforceability of, or
liability under, any provision of this Agreement or any guarantee of performance
thereof (including as a result of any contest by the Executive about the amount
of any payment pursuant to this Agreement), plus in each case interest on any
delayed payment at the applicable Federal rate provided for in Section
7872(f)(2)(A) of the Code.
 
            (b) If there shall be any dispute between the Company and the
Executive (i) in the event of any termination of the Executive's employment by
the Company, whether such termination was for Cause, or (ii) in the event of any
termination of employment by the Executive, whether Good Reason existed, then,
unless and until there is a final, nonappealable judgment by a court of
competent jurisdiction declaring that such termination was for Cause or that the
determination by the Executive of the existence of Good Reason was not made in
good faith, as the case may be, the Company shall pay all amounts, and provide
all benefits, to the Executive and/or the Executive's family or other
beneficiaries, as the case may be, that the Company would be required to pay or
provide pursuant to Section 6(a) as though such termination were by the Company
without Cause or by the Executive with Good Reason; PROVIDED, HOWEVER, that the
Company shall not be required to pay any disputed amounts pursuant to this
paragraph except upon receipt of an undertaking by or on behalf of the Executive
and/or the Executive's family or other beneficiaries, as the case may be, to
repay all such amounts to which the Executive is ultimately adjudged by such
court not to be entitled.
 
      10.   CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY.
 
            (a) Notwithstanding anything in this Agreement to the contrary, in
the event it shall be determined that any payment or distribution by the Company
to or for the benefit of the Executive (whether paid or payable or distributed
or distributable pursuant to the terms of this 
 
                                     -9-
<PAGE>
Agreement or otherwise, but determined without regard to any additional payments
required under this Section 10) (a "PAYMENT") would be subject to the excise tax
imposed by Section 4999 of the Code or any interest or penalties are incurred by
the Executive with respect to such excise tax (such excise tax, together with
any such interest and penalties, are hereinafter collectively referred to as the
"EXCISE TAX"), then the Executive shall be entitled to receive an additional
payment (a "GROSS-UP PAYMENT") in an amount such that after payment by the
Executive of all taxes (including any interest or penalties imposed with respect
to such taxes), including, without limitation, any income taxes (and any
interest and penalties imposed with respect thereto) and Excise Tax imposed upon
the Gross-Up Payment, the Executive retains an amount of the Gross- Up Payment
equal to the Excise Tax imposed upon the Payments.
 
            (b) Subject to the provisions of Section 10(c), all determinations
required to be made under this Section 10, including whether and when a Gross-Up
Payment is required and the amount of such Gross-Up Payment and the assumptions
to be utilized in arriving at such determination, shall be made by the Company's
independent certified public accountants (the "ACCOUNTING FIRM") which shall
provide detailed supporting calculations both to the Company and the Executive
within 15 business days of the receipt of notice from the Executive that there
has been a Payment, or such earlier time as is requested by the Company. In the
event that the Accounting Firm is serving as accountant or auditor for the
individual, entity or group effecting the Change of Control, the Executive shall
appoint another nationally recognized accounting firm to make the determinations
required hereunder (which accounting firm shall then be referred to as the
Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall
be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to
this Section 10, shall be paid by the Company to the Executive within five days
of the receipt of the Accounting Firm's determination. If the Accounting Firm
determines that no Excise Tax is payable by the Executive, it shall furnish the
Executive with a written opinion that failure to report the Excise Tax on the
Executive's applicable federal income tax return would not result in the
imposition of a negligence or similar penalty. Any determination by the
Accounting Firm shall be binding upon the Company and the Executive. As a result
of the uncertainty in the application of Section 4999 of the Code at the time of
the initial determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments which will not have been made by the Company should have been
made ("UNDERPAYMENT"), consistent with the calculations required to be made
hereunder. In the event that the Company exhausts its remedies pursuant to
Section 10(c) and the Executive thereafter is required to make a payment of any
Excise Tax, the Accounting Firm shall determine the amount of the Underpayment
that has occurred, and any such Underpayment shall be promptly paid by the
Company to or for the benefit of the Executive.
 
            (c) The Executive shall notify the Company in writing of any claim
by the Internal Revenue Service that, if successful, would require the payment
by the Company of the Gross-Up Payment. Such notification shall be given as soon
as practicable but no later than ten business days after the Executive is
informed in writing of such claim and shall apprise the Company of the nature of
such claim and the date on which such claim is requested to be paid. The
Executive shall not pay such claim prior to the expiration of the 30-day period
following the date on which it gives such notice to the Company (or such shorter
period ending on the date that any payment of taxes with respect to such claim
is due). If the Company notifies the Executive 
 
                                     -10-
<PAGE>
in writing prior to the expiration of such period that it desires to contest
such claim, the Executive shall:
 
                  (i) give the Company any information reasonably requested by
      the Company relating to such claim,
 
                  (ii) take such action in connection with contesting such claim
      as the Company shall reasonably request in writing from time to time,
      including, without limitation, accepting legal representation with respect
      to such claim by an attorney reasonably selected by the Company,
 
                  (iii) cooperate with the Company in good faith in order
      effectively to contest such claim, and
 
                  (iv) permit the Company to participate in any proceedings
      relating to such claim;
 
PROVIDED, HOWEVER, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing provisions of
this Section 10(c), the Company shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or forgo any
and all administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim and may, at its sole option, either
direct the Executive to pay the tax claimed and sue for a refund or contest the
claim in any permissible manner, and the Executive agrees to prosecute and
contest to a determination before any administrative tribunal, in a court of
initial jurisdiction and in one or more appellate courts, as the Company shall
determine; PROVIDED, HOWEVER, that if the Company directs the Executive to pay
such claim and sue for a refund, the Company shall advance the amount of such
payment to the Executive, on an interest-free basis, and shall indemnify and
hold the Executive harmless, on an after-tax basis, from any Excise Tax or
income tax (including interest or penalties with respect thereto) imposed with
respect to such advance or with respect to any imputed income with respect to
such advance; and further provided that any extension of the statute of
limitations relating to payment of taxes for the taxable year of the Executive
with respect to which such contested amount is claimed to be due is limited
solely to such contested amount. Furthermore, the Company's control of the
contest shall be limited to issues with respect to which a Gross-Up Payment
would be payable hereunder, and the Executive shall be entitled to settle or
contest, as the case may be, any other issue raised by the Internal Revenue
Service or any other taxing authority.
 
            (d) If, after the receipt by the Executive of an amount advanced by
the Company pursuant to Section 10(c) hereof, the Executive becomes entitled to
receive any refund with respect to such claim, the Executive shall (subject to
the Company's complying with the requirements of Section 10(c) promptly pay to
the Company the amount of such refund (together with any interest paid or
credited thereon after taxes applicable thereto). If, after the receipt by the
Executive of 
 
                                     -11-
<PAGE>
an amount advanced by the Company pursuant to Section 10(c) hereof, a
determination is made that the Executive shall not be entitled to any refund
with respect to such claim and the Company does not notify the Executive in
writing of its intent to contest such denial of refund prior to the expiration
of 30 days after such determination, then such advance shall be forgiven and
shall not be required to be repaid and the amount of such advance shall offset,
to the extent thereof, the amount of Gross-Up Payment required to be paid.
 
      11. CONFIDENTIAL INFORMATION. The Executive shall hold in a fiduciary
capacity for the benefit of the Company all secret or confidential information,
knowledge or data relating to the Company or any of its affiliated companies,
and their respective businesses, which shall have been obtained by the Executive
during the Executive's employment by the Company or any of its affiliated
companies and which shall not be or become public knowledge (other than by acts
by the Executive or representatives of the Executive in violation of this
Agreement). After termination of the Executive's employment with the Company,
the Executive shall not, without the prior written consent of the Company or as
may otherwise be required by law or legal process, communicate or divulge any
such information, knowledge or data to anyone other than the Company and those
designated by it. In no event shall an asserted violation of the provisions of
this Section 11 constitute a basis for deferring or withholding any amounts
otherwise payable to the Executive under this Agreement.
 
      12.   SUCCESSORS AND ASSIGNS.
 
            (a) This Agreement is personal to the Executive and without the
prior written consent of the Company shall not be assignable by the Executive
otherwise than by will or the laws of descent and distribution. This Agreement
shall inure to the benefit of and be enforceable by the Executive's legal
representatives.
 
            (b) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns.
 
            (c) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. As used in this Agreement, "COMPANY" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.
 
      13.   MISCELLANEOUS.
 
            (a) This Agreement shall be governed by and construed in accordance
with the laws of the State of Texas, without reference to principles of conflict
of laws. The captions of this Agreement are not part of the provisions hereof
and shall have no force or effect. This Agreement may not be amended or modified
otherwise than by a written agreement executed by the parties hereto or their
respective successors and legal representatives.
 
                                     -12-
<PAGE>
            (b) All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:
 
      If to the Executive: John R. Irwin
                        c/o Atwood Oceanics, Inc.
                        15835 Park Ten Place Drive
                        Houston, Texas 77084
 
      If to the Company: Atwood Oceanics, Inc.
                        15835 Park Ten Place Drive
                        Houston, Texas 77084
                        Attention: Chairman of the Board of Directors
 
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
 
            (c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.
 
            (d) The Company may withhold from any amounts payable under this
Agreement such Federal, state or local taxes as shall be required to be withheld
pursuant to any applicable law or regulation.
 
            (e) The Executive's or the Company's failure to insist upon strict
compliance with any provision hereof or any other provision of this Agreement or
the failure to assert any right the Executive or the Company may have hereunder,
including, without limitation, the right of the Executive to terminate
employment for Good Reason pursuant to Section 5(c)(i)-(v) hereof, shall not be
deemed to be a waiver of such provision or right or any other provision or right
of this Agreement.
 
            (f) The Executive and the Company acknowledge that, except as
specifically provided herein or as may otherwise be provided under any other
written agreement between the Executive and the Company, the employment of the
Executive by the Company is "at will" and, prior to the Change of Control Date,
may be terminated by either the Executive or the Company at any time, for any
reason. Moreover, if prior to the Change of Control Date the Executive's
employment with the Company terminates, then the Executive shall have no further
rights under this Agreement.
 
                                     -13-
<PAGE>
      IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
 
                              Executive:
 
                                  /s/ JOHN R. IRWIN
                                      JOHN R. IRWIN
 
                              Company:
 
                                  ATWOOD OCEANICS, INC.
 
                                  By: /s/  W. H. HELMERICH, III
                                     Name: W. H. Helmerich, III
                                     Title:Acting Chairman