ATWOOD OCEANICS, INC.
                 AMENDED AND RESTATED 2001 STOCK INCENTIVE PLAN
                                TABLE OF CONTENTS
 
                                                                           PAGE
 
ARTICLE I  PURPOSE..........................................................3
         Section 1.1. Purpose...............................................3
         Section 1.2. Establishment.........................................3
         Section 1.3. Shares Subject to the Plan............................3
ARTICLE II  DEFINITIONS.....................................................3
         Section 2.1. Affiliated Entity.....................................3
         Section 2.2. Award.................................................3
         Section 2.3. Award Agreement.......................................3
         Section 2.4. Board.................................................3
         Section 2.5. Change of Control Event...............................3
         Section 2.6. Code..................................................4
         Section 2.7. Committee.............................................5
         Section 2.8. Common Stock..........................................5
         Section 2.9. Company...............................................5
         Section 2.10.Date of Grant.........................................5
         Section 2.11.Director..............................................5
         Section 2.12.Eligible Employee.....................................5
         Section 2.13.Exchange Act..........................................5
         Section 2.14.Fair Market Value.....................................5
         Section 2.15.Incentive Stock Option................................5
         Section 2.16.Nonqualified Stock Option.............................5
         Section 2.17.Non-Employee Director.................................5
         Section 2.18.Option................................................5
         Section 2.19.Participant...........................................5
         Section 2.20.Plan..................................................5
         Section 2.21.Restricted Stock Award................................5
         Section 2.22.Securities Act........................................5
         Section 2.23.Subsidiary............................................5
ARTICLE III  ADMINISTRATION.................................................6
         Section 3.1. Administration of the Plan; the Committee.............6
         Section 3.2. Committee to Make Rules and Interpret Plan............6
ARTICLE IV  GRANT OF AWARDS.................................................7
         Section 4.1. Committee to Grant Awards to Eligible Employees.......7
         Section 4.2. Grant of Awards to Non-Employee Directors.............7
ARTICLE V  ELIGIBILITY......................................................7
ARTICLE VI  STOCK OPTIONS...................................................7
         Section 6.1. Grant of Options......................................7
         Section 6.2. Conditions of Options.................................8
ARTICLE VII  RESTRICTED STOCK AWARDS.......................................10
         Section 7.1. Grant of Restricted Stock Awards.....................10
         Section 7.2. Conditions of Restricted Stock Awards................10
ARTICLE VIII  STOCK ADJUSTMENTS............................................11
ARTICLE IX  GENERAL........................................................12
         Section 9.1. Amendment or Termination of Plan.....................12
         Section 9.2. Withholding Taxes....................................12
         Section 9.3. Change of Control....................................12
 
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         Section 9.4. Amendments to Awards.................................12
         Section 9.5. Regulatory Approval and Listings.....................12
         Section 9.6. Right to Continued Employment or Service.............13
         Section 9.7. Compliance with Section 16(b)........................13
         Section 9.8. Reliance on Reports..................................13
         Section 9.9. Construction.........................................13
         Section 9.10.Severability.........................................13
         Section 9.11.Governing Law........................................13
 
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                                   ARTICLE I
 
                                     PURPOSE
 
     Section 1.1.  Purpose.  This Amended and Restated 2001 Stock Incentive Plan
amends and restates in its entirety the 2001 Stock Incentive Plan (as so amended
and restated,  the "Plan").  The Plan was  established  by the Company to create
incentives  which are  designed to motivate  Participants  to put forth  maximum
effort toward the success and growth of the Company and to enable the Company to
attract and retain  experienced  individuals who by their position,  ability and
diligence are able to make  important  contributions  to the Company's  success.
Toward  these  objectives,  the Plan  provides  for the  granting  of Options to
Eligible  Employees  and awarding  Restricted  Stock to Eligible  Employees  and
Non-Employee Directors subject to the conditions set forth in the Plan.
 
     Section 1.2. Establishment.  The Plan originally became effective September
6, 2001,  subject to shareholder  approval which was  subsequently  obtained and
will continue for a period of ten years thereafter,  unless earlier  terminated,
at which time no further Awards shall be made hereunder. The amendments included
in this  restatement  of the Plan will be  effective  March 1, 2006,  subject to
shareholder  approval.  The Plan  shall  continue  in effect  until all  matters
relating  to the  payment  of Awards  and  administration  of the Plan have been
settled.
 
     Section 1.3.  Shares Subject to the Plan.  Subject to the  limitations  set
forth in the Plan,  Awards may be made under this Plan for a total of  1,000,000
shares of Common Stock.
 
                                   ARTICLE II
 
                                   DEFINITIONS
 
     Section 2.1. Affiliated Entity.  Affiliated Entity means any partnership or
limited  liability  company  in which a  majority  of the  partnership  or other
similar interest thereof is owned or controlled,  directly or indirectly, by the
Company  or  one or  more  of  its  Subsidiaries  or  Affiliated  Entities  or a
combination  thereof.  For  purposes  hereof,  the Company,  a Subsidiary  or an
Affiliated  Entity  shall be deemed to have a majority  ownership  interest in a
partnership  or limited  liability  company if the Company,  such  Subsidiary or
Affiliated  Entity  shall be  allocated  a majority  of  partnership  or limited
liability  company gains or losses or shall be or control a managing director or
a general partner of such partnership or limited liability company.
 
     Section 2.2. Award. Award means,  individually or collectively,  any Option
or  Restricted  Stock Award  granted  under the Plan to an Eligible  Employee or
Non-Employee  Director by the  Committee  pursuant  to such  terms,  conditions,
restrictions,  and/or limitations, if any, as the Committee may establish by the
Award Agreement or otherwise.
 
     Section 2.3. Award Agreement.  Award Agreement means any written instrument
that  establishes  the  terms,  conditions,   restrictions,  and/or  limitations
applicable to an Award in addition to those  established by this Plan and by the
Committee's exercise of its administrative powers.
 
Section 2.4.      Board.  Board means the board of directors of the Company.
 
 
Section 2.5.      Change of Control Event.  Change of Control Event means
each of the following:
 
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(a)      The  acquisition after the Effective Date of this Plan by any individual, entity or group (within the meaning of Section
         13(d)(3) or 14(d)(2) of the  Exchange  Act) (a "Person") of  beneficial  ownership  (within the meaning of Rule 13d-3
         promulgated  under the Exchange  Act) of 15% or more of either (1) the then  outstanding  shares of Common Stock (the
         "Outstanding  Company Common Stock") or (2) the combined voting power of the then  outstanding  voting  securities of
         the Company entitled to vote generally in the election of directors (the  "Outstanding  Company Voting  Securities");
         provided,  however,  that the following  acquisitions  shall not constitute a Change of Control:  (A) any acquisition
         directly from the Company,  (B) any acquisition by the Company,  (C) any acquisition by any employee benefit plan (or
         related  trust)  sponsored  or  maintained  by the Company or any  corporation  controlled  by the  Company,  (D) any
         acquisition  previously  approved by at least a majority of the members of the Incumbent  Board,  (E) any acquisition
         approved by at least a majority of the members of the  Incumbent  Board within five  business  days after the Company
 
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         has notice of such  acquisition,  or (F) any acquisition by any corporation  pursuant to a transaction which complies
         with clauses (1), (2), and (3) of subsection (c) of this Section 2.5; or
 
(b)      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,  appointment or nomination for election by the Company's shareholders,  was approved by a vote
         of at least a majority of then  Incumbent  Board shall be considered as though such  individual  were a member of the
         Incumbent Board,  but excluding,  for purposes of this  definition,  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; or
 
(c)      Approval by the shareholders of the Company of a reorganization, share exchange, merger(a "Business Combination"), in each
         case, unless,  following such Business Combination,  (1) all or substantially all of the individuals and entities who
         were the beneficial  owners,  respectively,  of the Outstanding  Company Common Stock and Outstanding  Company Voting
         Securities  immediately prior to such Business  Combination will beneficially own, directly or indirectly,  more than
         70% of,  respectively,  the then  outstanding  shares  of  common  stock and the  combined  voting  power of the then
         outstanding  voting  securities  entitled to vote generally in the election of directors,  as the case may be, of the
         corporation resulting from such Business Combination (including,  without limitation, a corporation which as a result
         of such transaction will own the Company through one or more  subsidiaries) in substantially  the same proportions as
         their  ownership,  immediately  prior to such  Business  Combination  of the  Outstanding  Company  Common  Stock and
         Outstanding  Company Voting  Securities,  as the case may be, (2) no Person  (excluding any employee benefit plan (or
         related trust) of the Company or such corporation  resulting from such Business  Combination)  will beneficially own,
         directly or indirectly, 15% or more of, respectively,  the then outstanding shares of common stock of the corporation
         resulting from such Business  Combination or the combined voting power of the then outstanding  voting  securities of
         such  corporation  except to the extent that such  ownership  existed prior to the Business  Combination,  and (3) at
         least a  majority  of the  members  of the  board of  directors  of the  corporation  resulting  from  such  Business
         Combination  were members of the  Incumbent  Board at the time of the execution of the initial  agreement,  or of the
         action of the Board, providing for such Business Combination or were elected, appointed or nominated by the Board; or
 
(d)      Approval by the shareholders of the Company of (1) a complete liquidation or dissolution of the Company or,(2) the sale or
         other  disposition  of all or  substantially  all of the assets of the  Company,  other than to a  corporation,  with
         respect to which following such sale or other disposition,  (A) more than 70% of, respectively,  the then outstanding
         shares of common stock of such  corporation and the combined voting power of the then outstanding  voting  securities
         of such corporation  entitled to vote generally in the election of directors is then beneficially owned,  directly or
         indirectly,  by  all  or  substantially  all  of the  individuals  and  entities  who  were  the  beneficial  owners,
         respectively,  of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to
         such sale or other  disposition in substantially  the same proportion as their ownership,  immediately  prior to such
         sale or other disposition,  of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the
         case may be, (B) less than 15% of, respectively,  the then outstanding shares of common stock of such corporation and
         the combined voting power of the then outstanding  voting  securities of such corporation  entitled to vote generally
         in the election of directors  will be  beneficially  owned,  directly or  indirectly,  by any Person  (excluding  any
         employee benefit plan (or related trust) of the Company or such  corporation),  except to the extent that such Person
         owned 15% or more of the Outstanding  Company Common Stock or Outstanding Company Voting Securities prior to the sale
         or  disposition,  and (C) at least a majority  of the  members of the board of  directors  of such  corporation  were
         members of the Incumbent Board at the time of the execution of the initial agreement,  or of the action of the Board,
         providing for such sale or other disposition of assets of the Company or were elected,  appointed or nominated by the
         Board.
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     Section  2.6.  Code.  Code  means the  Internal  Revenue  Code of 1986,  as
amended.  References  in the Plan to any  section of the Code shall be deemed to
include  any  amendments  or  successor  provisions  to  such  section  and  any
regulations under such section.
 
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     Section 2.7. Committee.  Committee means the Compensation  Committee of the
Board.
 
     Section 2.8. Common Stock.  Common Stock means the common stock,  par value
$1.00 per share,  of the Company,  and after  substitution,  such
other stock as shall be substituted therefor as provided in Article VIII.
 
     Section  2.9.  Company.  Company  means  Atwood  Oceanics,  Inc.,  a  Texas
corporation.
 
     Section  2.10.  Date of  Grant.  Date of Grant  means the date on which the
granting  of an  Award  to a  Participant  is  authorized  by  this  Plan or the
Committee,  or such  later  date as may be  specified  by the  Committee  in its
authorization.
 
     Section 2.11.  Director.  Director  means any individual who is a member of
the Board.
 
     Section 2.12.  Eligible Employee.  Eligible Employee means any key employee
of the Company, a Subsidiary,  or an Affiliated Entity,  specifically  including
officers and Directors (other than Non-Employee Directors), who are from time to
time  responsible for the  management,  growth and protection of the business of
the Company.
 
     Section 2.13.  Exchange Act. Exchange Act means the Securities Exchange Act
of 1934, as amended.  References in the Plan to any section,  rule or regulation
of the Exchange Act shall be deemed to include any  amendments  or successors to
such section, rule, or regulation.
 
     Section 2.14.  Fair Market  Value.  Fair Market Value means (i) during such
time as the  Common  Stock is listed  upon the New York  Stock  Exchange,  other
exchanges or the  Nasdaq/National  Market System, the average of the highest and
lowest sales  prices of the Common  Stock as reported by such stock  exchange or
the  Nasdaq/National  Market  System  on the day for which  such  value is to be
determined,  or if no sale of the Common  Stock shall have been made on any such
stock  exchange  or the  Nasdaq/National  Market  System  that day,  on the next
preceding  day on which there was a sale of such Common Stock or (ii) during any
such time as the Common Stock is not listed upon an  established  stock exchange
or the  Nasdaq/National  Market System,  the mean between dealer "bid" and "ask"
prices of the Common Stock in the  over-the-counter  market on the day for which
such value is to be  determined,  as reported  by the  National  Association  of
Securities Dealers, Inc.
 
     Section  2.15.  Incentive  Stock  Option.  Incentive  Stock Option means an
Option within the meaning of Section 422 of the Code.
 
     Section 2.16. Nonqualified Stock Option. Nonqualified Stock Option means an
Option which is not an Incentive Stock Option.
 
Section 2.17. Non-Employee Director. Non-Employee Director means "non-employee
director" as defined in Rule 16b-3 of the General Rules and Regulations under
the Exchange Act.
 
Section 2.18. Option. Option means an Award of an option to purchase shares of
Common Stock granted to an Eligible Employee under Article VI of the Plan and
includes both Nonqualified Stock Options and Incentive Stock Options.
 
Section 2.19. Participant. Participant means an Eligible Employee or
Non-Employee Director to whom an Award has been granted.
 
     Section  2.20.  Plan.  Plan  means the  Atwood  Oceanics,  Inc.  2006 Stock
Incentive Plan.
 
     Section 2.21. Restricted Stock Award. Restricted Stock Award means an Award
of shares of Common Stock granted to an Eligible  Employee  under Article VII of
the Plan or a Non-Employee Director under Articles IV and VII of the Plan.
 
     Section 2.22.  Securities Act. Securities Act shall mean the Securities Act
of 1933, as amended.  References in the Plan to any section,  rule or regulation
of the Securities Act shall be deemed to include any amendments or successors to
such section, rule, or regulation.
 
     Section  2.23.  Subsidiary.  Subsidiary  shall  have  the same  meaning  as
"subsidiary corporation" is defined in Section 424 of the Code.
 
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                                  ARTICLE III
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                                 ADMINISTRATION
 
Section 3.1.      Administration of the Plan; the Committee.
                  -----------------------------------------
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(a)      The Committee shall  administer the Plan. The Committee shall consist solely of two or more Non-Employee Directors who are
         appointed  by, and serve at the  pleasure  of the Board.  Unless  otherwise  provided in the  by-laws,  as amended or
         restated from time to time,  of the Company or the  resolutions  adopted from time to time by the Board  establishing
         the Committee,  the Board may from time to time remove  members from, or add members to, the Committee.  Vacancies on
         the Committee,  however  caused,  shall be filled by the Board.  The Committee  shall hold meetings at such times and
         places as it may determine.  A majority of the members of the Committee shall constitute a quorum,  and the acts of a
         majority  of the  members  present at any  meeting at which a quorum is present  or acts  reduced to or  approved  in
         writing by a majority of the members of the Committee shall be the valid acts of the Committee.
 
(b)     Subject to the provisions of the Plan, specifically the provisions of Section 4.2, the Committee shall have exclusive
        power to:
 
        (i)    Select the Eligible Employees to whom Awards shall be granted.
 
        (ii)   Determine the time or times when Awards will  be made to Eligible Employees.
 
        (iii)  Determine the form of an Award granted to an Eligible Employee, whether an Option or a
               Restricted Stock Award, the number of shares of Common Stock subject to the Award, all
               the terms, conditions (including performance requirements), restrictions and/or
               limitations, if any, of an Award, including the time and conditions of exercise or
               vesting, and the terms of any Award Agreement, which may include the waiver or
               amendment of prior terms and conditions or acceleration or early vesting or payment of
               an Award under certain circumstances determined by the Committee.
 
        (iv)   Determine the terms, conditions (including performance requirements), restrictions
               and/or limitations, if any, of a Restricted Stock Award granted to a Non-Employee
               Director, including the time of vesting, and the terms of any Award Agreement, which may
               include the waiver or amendment of prior terms and conditions or acceleration or
               early vesting under certain circumstances determined by the Committee.
 
        (v)    Determine whether Awards granted to Eligible Employees will be granted singly or in combination.
 
        (vi)   Accelerate the vesting, exercise or payment of an Award or the performance period of an Award.
 
        (vii)  Take any and all other action it deems necessary or advisable for the proper operation or
               administration of the Plan.
 
     Section 3.2.  Committee to Make Rules and Interpret  Plan. The Committee in
its sole discretion  shall have the authority,  subject to the provisions of the
Plan, to establish,  adopt, or revise such rules and regulations and to make all
such  determinations  relating to the Plan as it may deem necessary or advisable
for the  administration of the Plan. The Committee's  interpretation of the Plan
or any Awards and all decisions and determinations by the Committee with respect
to the Plan shall be final, binding, and conclusive on all parties.
 
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                                   ARTICLE IV
 
                                 GRANT OF AWARDS
 
     Section 4.1. Committee to Grant Awards to Eligible Employees. The Committee
may,  from  time  to  time,  grant  Awards  to one or more  Eligible  Employees,
provided, however, that:
 
(a)               Subject to Article VIII, the aggregate number of shares of
                  Common Stock made subject to the Award of Options to any
                  single Eligible Employee in any fiscal year may not exceed
                  50,000.
 
(b)               Subject to Article VIII, in no event shall more than 150,000
                  shares of Common Stock subject to the Plan be awarded to
                  Participants as Restricted Stock Awards, excluding those made
                  to Non-Employee Directors pursuant to Section 4.2.
 
(c)               No shares of Common Stock related to Awards which terminate by
                  expiration, forfeiture, cancellation or otherwise without the
                  issuance of shares of Common Stock, or which are exchanged in
                  the Committee's discretion for Awards not involving Common
                  Stock, or which are withheld to satisfy applicable tax
                  requirements, shall be available again for grant under the
                  Plan.
 
(d)               Common Stock delivered by the Company in payment of any Award
                  under the Plan may be authorized and unissued Common Stock or
                  Common Stock held in the treasury of the Company.
 
(e)               Except as specifically provided for herein, the Committee
                  shall, in its sole discretion, determine the manner in which
                  fractional shares arising under this Plan shall be treated.
 
     Section 4.2. Grant of Awards to Non-Employee Directors.  During each fiscal
year of the Company,  the Committee shall grant a Restricted Stock Award to each
Non-Employee  Director.  The number of shares of Common  Stock  included in such
Restricted  Stock Award shall be the number of shares of Common Stock equivalent
to $40,000, adjusted for inflation, based on the Fair Market Value of a share of
Common  Stock on the Date of Grant.  During the first  fiscal  year in which the
Plan is  effective,  the Date of Grant shall be the date of the first meeting of
the Board  following the later of (a)  shareholder  approval of the Plan and (b)
each such Director's election, re-election,  appointment, or re-appointment, but
no more than once in such fiscal year. In subsequent  fiscal years,  the Date of
Grant  shall be the  earlier  of the date of the first  meeting of the Board (x)
during any such fiscal year and (y) each such Director's election,  re-election,
appointment,  or re-appointment,  but no more than once in any such fiscal year.
Restrictions on such Restricted  Stock Awards granted to Non-Employee  Directors
shall be determined by the Committee, subject to the provisions of the Plan.
 
ARTICLE V
 
                                   ELIGIBILITY
 
     Subject to the  provisions of the Plan, the Committee  shall,  from time to
time,  select from the Eligible  Employees those to whom Awards shall be granted
and shall  determine the type or types of Awards to be made.  Each  Non-Employee
Director of the Company is  eligible  to be a granted a  Restricted  Stock Award
each fiscal year as set forth in Section  4.2.  For all  Awards,  the  Committee
shall  establish  in  the  related  Award  Agreements  the  terms,   conditions,
restrictions and/or limitations, if any, applicable to the Awards in addition to
those set forth in the Plan and the administrative  rules and regulations issued
by the Committee.
 
ARTICLE VI
 
                                  STOCK OPTIONS
 
     Section  6.1.  Grant of  Options.  The  Committee  may,  from time to time,
subject to the  provisions of the Plan and such other terms and conditions as it
may  determine,  grant  Options to  Eligible  Employees.  These  Options  may be
Incentive Stock Options or Nonqualified Stock Options, or a combination of both.
 
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Each grant of an Option shall be evidenced by an Award Agreement executed by the
Company and the Eligible  Employee,  and shall contain such terms and conditions
and be in such form as the Committee  may from time to time approve,  subject to
the requirements of Section 6.2.
 
     Section 6.2. Conditions of Options. Each Option so granted shall be subject
to the following conditions:
 
     (a)  Exercise  Price.  As  limited  by  Section  6.2(f)  below,  each Award
Agreement shall state the exercise price of the Option which shall be set by the
Committee at the Date of Grant; provided, however, no Option shall be granted at
an exercise  price which is less than the Fair Market  Value of the Common Stock
on the Date of Grant.
 
     (b) Form of  Payment.  The  exercise  price of an Option may be paid (1) in
cash or by check, bank draft or money order payable to the order of the Company;
(2) by delivering  shares of Common Stock having a Fair Market Value on the date
of payment  equal to the amount of the  exercise  price,  but only to the extent
such exercise of an Option would not result in an accounting compensation charge
with  respect to the shares  used to pay the  exercise  price  unless  otherwise
determined by the Committee;  or (3) a combination of the foregoing. In addition
to the  foregoing,  any  Option  granted  under the Plan may be  exercised  by a
broker-dealer  acting on behalf of an Eligible Employee if (A) the broker-dealer
has received from the Eligible  Employee or the Company a notice  evidencing the
exercise  of such  Option  and  instructions  signed  by the  Eligible  Employee
requesting  the  Company to deliver the shares of Common  Stock  subject to such
Option to the  broker-dealer  on behalf of the Eligible  Employee and specifying
the account into which such shares should be deposited,  (B) adequate  provision
has been made with respect to the payment of any withholding taxes due upon such
exercise or, in the case of an Incentive  Stock Option,  upon the disposition of
such shares and (C) the  broker-dealer  and the Eligible Employee have otherwise
complied  with Section  220.3(e)(4)  of  Regulation  T, 12 CFR, Part 220 and any
successor rules and regulations applicable to such exercise.
 
(c)               Exercise of Options.
 
     (i)  Generally.  Options  granted under the Plan shall be  exercisable,  in
whole or in such  installments  and at such times, and  shall expire at
such  time,  as shall be  provided  by the  Committee  in the  Award  Agreement,
however,  no Incentive  Stock Option  shall be  exercisable  more than ten years
after its Date of Grant and no  Nonqualified  Stock Option shall be  exercisable
more than ten years and one day after its Date of Grant.  Exercise  of an Option
shall be by  written  notice  to the  Secretary  at least two  business  days in
advance of such exercise stating the election to exercise in the form and manner
determined by the Committee.  Every share of Common Stock  acquired  through the
exercise  of an Option  shall be deemed to be fully paid at the time of exercise
and payment of the exercise price and  applicable  withholding  taxes.  Separate
certificates  representing  Common Stock to be delivered to an Eligible Employee
upon the exercise of any Option will be issued to such Eligible Employee.
 
     (ii) Termination of Employment.  If an Eligible Employee's  employment with
the Company,  a Subsidiary  or an Affiliated  Entity  terminates on or after his
"Retirement  Date"  as  such  term  is  defined  in the  Atwood  Oceanics,  Inc.
Employees'  Retirement Plan (or its successor),  or an Eligible Employee suffers
death or a permanent  or total  disability  (as defined in Section  22(e) of the
Code),  the Eligible  Employee (or his  personal  representative  in the case of
death)  shall be entitled to purchase  all or any part of the shares  subject to
any (i) vested  Incentive  Stock  Option for a period of up to three months from
such  date of  termination  (one  year in the case of death  or  disability  (as
defined  above) in lieu of the 3 month  period),  and (ii)  vested  Nonqualified
Stock Option during the remaining term of the Option. If an Eligible  Employee's
employment  terminates  for any other  reason,  the Eligible  Employee  shall be
entitled to purchase all or any part of the shares  subject to any vested Option
for a period of up to three  months from such date of  termination.  In no event
shall any Option be exercisable past the term of the Option.  The Committee may,
in its sole discretion,  accelerate the vesting of unvested Options in the event
of termination of employment of any Eligible Employee.
 
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     (d)  Limited  Transferability.   The  Committee  may,  in  its  discretion,
authorize all or a portion of the Nonqualified  Stock Options granted under this
Plan to be on terms which permit  transfer by the  Eligible  Employee to (i) the
ex-spouse of the Eligible Employee pursuant to the terms of a domestic relations
order,  (ii) the spouse,  children or  grandchildren  of the  Eligible  Employee
("Immediate Family Members"),  (iii) a trust or trusts for the exclusive benefit
of such Immediate Family Members,  or (iv) a partnership in which such Immediate
Family  Members  are the only  partners.  In addition  (1) unless the  Committee
otherwise permits,  there may be no consideration for any such transfer, (2) the
Award Agreement  pursuant to which such  Nonqualified  Stock Options are granted
must  be   approved  by  the   Committee,   and  must   expressly   provide  for
transferability  in a manner consistent with this paragraph,  and (3) subsequent
transfers of transferred  Nonqualified  Stock Options shall be prohibited except
as set  forth  below  in this  Section  6.2(d).  Following  transfer,  any  such
Nonqualified  Stock Options  shall  continue to be subject to the same terms and
conditions as were applicable  immediately prior to transfer,  provided that for
purposes of Section  6.2(c)(ii)  hereof,  the term "Eligible  Employee" shall be
deemed to refer to the  transferee.  The events of  termination of employment of
Section  6.2(c)(ii)  hereof  shall  continue to be applied  with  respect to the
original Eligible Employee, following which the Nonqualified Stock Options shall
be  exercisable  by the  transferee  only to the  extent,  and  for the  periods
specified in Section  6.2(c)(ii)  hereof.  No transfer  pursuant to this Section
6.2(d) shall be effective to bind the Company unless the Company shall have been
furnished  with  written  notice  of such  transfer  together  with  such  other
documents  regarding  the transfer as the  Committee  shall  request.  Except as
otherwise  specifically provided for herein,  Options shall be transferable only
by will or the laws of descent and  distribution;  however,  no such transfer of
Options by the Eligible  Employee  shall be effective to bind the Company unless
the Company shall have been  furnished  with written notice of such transfer and
an  authenticated  copy of the will and/or such other  evidence as the Committee
may deem  necessary to establish the validity of the transfer and the acceptance
by the  transferee  of the terms and  conditions  of such  Options.  Any Options
transferred by will or the laws of descent and distribution shall continue to be
subject to the same terms and conditions as were applicable immediately prior to
transfer.
 
     (e) Other Terms and Conditions.  Among other conditions that may be imposed
by the Committee, if deemed appropriate, are those relating to (1) the period or
periods and the  conditions  of  exercisability  of any Option;  (2) the minimum
periods  during which Eligible  Employees  must be employed by the Company,  its
Subsidiaries,  or an Affiliated  Entity, or must hold Options before they may be
exercised;  (3) the minimum  periods during which shares  acquired upon exercise
must be held before sale or transfer shall be permitted;  (4)  conditions  under
which such Options or shares may be subject to forfeiture;  (5) the frequency of
exercise or the minimum or maximum  number of shares that may be acquired at any
one time; (6) the achievement by the Company of specified  performance criteria;
and (7) non-compete and protection of business matters.
 
     (f) Special  Restrictions  Relating to  Incentive  Stock  Options.  Options
issued  in the  form  of  Incentive  Stock  Options  shall  be  granted  only to
individuals  who  are  Eligible  Employees  of  the  Company  or  a  Subsidiary.
Furthermore,  Incentive Stock Options shall, in addition to being subject to all
applicable terms, conditions, restrictions and/or limitations established by the
Committee,  comply with the requirements of Section 422 of the Code,  including,
without  limitation,  the  requirement  that the exercise  price of an Incentive
Stock  Option not be less than 100% of the Fair Market Value of the Common Stock
on its Date of Grant, the requirement  that each Incentive Stock Option,  unless
sooner  exercised,  terminated or cancelled,  expire no later than 10 years from
its Date of Grant,  and the  requirement  that the  aggregate  Fair Market Value
(determined  on the Date of Grant) of the  Common  Stock  with  respect to which
Incentive  Stock  Options  are  exercisable  for the  first  time by a  Eligible
Employee  during  any  fiscal  year  (under  this Plan or any other  plan of the
Company or any Subsidiary) not exceed $100,000.
 
     (g)  Application  of Funds.  The proceeds  received by the Company from the
sale of Common  Stock  pursuant to exercise of Options  will be used for general
corporate purposes.
 
     (h)  Shareholder  Rights.  No  Eligible  Employee  shall  have a right as a
shareholder with respect to any share of Common Stock subject to an Option prior
to purchase of such shares of Common Stock by exercise of the Option.
 
                                       9
<PAGE>
ARTICLE VII
 
                             RESTRICTED STOCK AWARDS
 
     Section 7.1. Grant of Restricted Stock Awards. The Committee may, from time
to  time,  subject  to the  provisions  of the Plan and  such  other  terms  and
conditions as it may determine,  grant a Restricted  Stock Award to any Eligible
Employee.  All  Restricted  Stock  Awards  made to Eligible  Employees  shall be
awarded  in such  number  and at such  times  during the term of the Plan as the
Committee shall determine.  The Committee shall grant Restricted Stock Awards to
Non-Employee  Directors as set forth in Section 4.2. As a condition to the grant
of a  Restricted  Stock  Award  under the Plan,  each  Participant  so granted a
Restricted  Stock  Award  shall  execute  and  deliver  to the  Company an Award
Agreement.
 
     Section  7.2.  Conditions  of  Restricted  Stock  Awards.  The  grant  of a
Restricted    Stock    Award    shall    be    subject    to   the    following:
-------------------------------------
 
(a)          Restriction Period.
 
  (i)          Generally. The period in which restrictions
               apply to Restricted Stock Awards is a
               "Restriction Period." The Award Agreement
               will set forth, among other things, any
               vesting requirements and Restriction
               Periods.
 
  (ii)         Eligible Employees. As to Eligible
               Employees, vesting conditions may include,
               but are not limited to, the achievement by
               the Company of specified performance
               criteria, and the requirement to remain in
               the employment of the Company, a Subsidiary,
               or an Affiliated Entity for a prescribed
               period of time. The Committee shall
               determine the Restriction Period which shall
               apply to the shares of Common Stock included
               in a Restricted Stock Award, or portion
               thereof, granted to an Eligible Employee;
               provided, however, the Restriction Period
               related to a Restricted Stock Award granted
               to an Eligible Employee shall be no less
               than six months nor more than ten years.
 
  (iii)        Non-Employee Directors. The Restriction
               Period for shares of Common Stock included
               in a Restricted Stock Award granted to a
               Non-Employee Director shall be three years,
               with 100% of the shares included in the
               Restricted Stock Award vesting on the Date
               of Grant.
 
(b)          Restrictions. Except as specifically
             provided for in the Plan or an Award
             Agreement, the holder of a Restricted Stock
             Award may not sell, transfer, pledge,
             exchange, hypothecate, or otherwise dispose
             of the shares of Common Stock represented by
             the Restricted Stock Award during the
             applicable Restriction Period. The Committee
             shall impose such other restrictions and
             conditions on any shares of Common Stock
             related to a Restricted Stock Award as it
             may deem advisable including, without
             limitation, restrictions under applicable
             federal or state securities laws, and may
             legend the certificates representing shares
             of Common Stock related to Restricted Stock
             Awards to give appropriate notice of such
             restrictions.
 
(c)          Lapse of Restrictions. The restrictions set
             forth in the paragraph (b) above shall
             terminate with respect to the shares of
             Common Stock to which they apply upon the
             earliest to occur of the following, except
             that no restrictions shall lapse less than
             six months from the Date of Grant of a
             Restricted Stock Award in the event of (i),
             (ii), (iii) and (iv) below, unless otherwise
             specified by the Committee:
  (i)          Upon the expiration of the applicable
               Restriction Period;
 
 
                                       10
<PAGE>
  (ii)         Upon the termination of an Eligible
               Employee's employment with the Company, a
               Subsidiary or an Affiliated Entity, if
               occurring on or after his "Retirement Date"
               as such term is defined in the Atwood
               Oceanics, Inc. Employees' Retirement Plan
               (or its successor);
 
  (iii)        The Participant's total and permanent
               disability (as defined in Section 22(e) of
               the Code);
 
  (iv)         The Participant's death;
 
  (v)          The occurrence of a Change of Control Event;or
 
  (vi)         The acceleration of the termination of such
               restrictions on such terms and conditions as
               the Committee may establish in its sole
               discretion.
 
     To the  extent a  Restricted  Stock  Award is not vested at the time of the
occurrence of one of the events  specified in (i),  (ii),  (iii),  (iv), or (vi)
above,  any Restricted Stock Award  transferred  subsequent to the occurrence of
such event shall continue to be subject to the same terms and conditions as were
applicable  immediately prior to transfer.  Such transfer shall not be effective
to bind the Company  unless the Company shall have been  furnished  with written
notice of such  transfer and an  authenticated  copy of the will (in the case of
death of the  Participant)  and/or such other evidence as the Committee may deem
necessary to establish  the validity of the transfer and the  acceptance  by the
transferee of the terms and conditions of such Restricted Stock Award.
 
     (d) Delivery of Share Certificates;  Legending. Each Restricted Stock Award
may be evidenced in such manner as the Committee deems  appropriate,  including,
without limitation, a book-entry registration or issuance of a stock certificate
or  certificates.  Until the  applicable  Restriction  Period has  expired,  the
Company or its designee  shall hold in escrow any  certificate  or  certificates
representing  shares  of Common  Stock  issued to a  Participant  pursuant  to a
Restricted  Stock  Award.  Certificates  for  shares of Common  Stock  delivered
pursuant to a Restricted Stock Award may, if the Committee so determines, bear a
legend  referring to the  restrictions  and the instruments to which such shares
are subject.
 
     (e) Rights as Shareholders.  During any Restriction  Period,  the Committee
may, in its discretion,  grant to the holder of a Restricted  Stock Award all or
any of the rights of a shareholder  with respect to the shares,  including,  but
not by way of limitation, the right to vote such shares and to receive dividends
and to purchase  securities  pursuant to that  certain  Rights  Agreement by and
between the Company and  Continental  Stock  Transfer & Trust Company (as Rights
Agent)  dated  October  18,  2002,  as the  same  may be  amended,  modified  or
supplement from time to time. If any dividends or other  distributions  are paid
in  shares  of  Common  Stock,  all such  shares  shall be  subject  to the same
restrictions on  transferability  as the shares included in the Restricted Stock
Award with respect to which they were paid.
 
ARTICLE VIII
 
                                STOCK ADJUSTMENTS
 
     In the event that the shares of Common  Stock,  as  presently  constituted,
shall be changed into or exchanged  for a different  number or kind of shares of
stock or other securities of the Company or of another  corporation  (whether by
reason  of  merger,  consolidation,  recapitalization,  reclassification,  stock
split,  spinoff,  combination of shares or otherwise),  or if the number of such
shares of  Common  Stock  shall be  increased  through  the  payment  of a stock
dividend,  or a dividend on the shares of Common  Stock or rights or warrants to
purchase securities of the Company shall be issued to holders of all outstanding
Common  Stock,  then  there  shall be  substituted  for or  added to each  share
available under and subject to the Plan, and each share theretofore appropriated
under the Plan, the number and kind of shares of stock or other  securities into
which each  outstanding  share of Common  Stock shall be so changed or for which
each  such  share  shall be  exchanged  or to which  each  such  share  shall be
entitled,  as the case may be, on a fair and equivalent basis in accordance with
the applicable  provisions of Section 424 of the Code; provided,  however,  with
respect  to  Options,  in  no  such  event  will  such  adjustment  result  in a
modification  of any Option as defined  in  Section  424(h) of the Code.  In the
event there shall be any other  change in the number or kind of the  outstanding
shares of Common Stock,  or any stock or other  securities into which the Common
Stock shall have been changed or for which it shall have been exchanged, then if
the  Committee  shall,  in its  sole  discretion,  determine  that  such  change
equitably  requires an adjustment in the shares  available  under and subject to
the Plan, or in any Award,  theretofore granted,  such adjustments shall be made
in accordance with such  determination,  except that no adjustment of the number
of shares of Common Stock available under the Plan or to which any Award relates
that would  otherwise be required shall be made unless and until such adjustment
either by itself or with other  adjustments not previously made would require an
increase  or  decrease  of at least 1% in the  number of shares of Common  Stock
available under the Plan or to which any Award relates  immediately prior to the
making  of  such   adjustment   (the  "Minimum   Adjustment").   Any  adjustment
 
                                       11
<PAGE>
representing a change of less than such minimum amount shall be carried forward
and made as soon as such adjustment together with other adjustments  required by
this Article VIII and not previously made would result in a Minimum  Adjustment.
Notwithstanding  the  foregoing,  any  adjustment  required by this Article VIII
which  otherwise  would not  result in a Minimum  Adjustment  shall be made with
respect to shares of Common  Stock  relating to any Award  immediately  prior to
exercise, payment or settlement of such Award.
 
     No fractional  shares of Common Stock or units of other securities shall be
issued  pursuant  to any  adjustment  pursuant  to this  Article  VIII,  and any
fractions resulting from any such adjustment shall be eliminated in each case by
rounding  downward to the nearest  whole share of Common  Stock or unit of other
securities.
 
ARTICLE IX
 
                                     GENERAL
 
     Section 9.1. Amendment or Termination of Plan. The Board may amend, suspend
or  terminate  the Plan at any time,  but  except as  specifically  provided  in
writing, no amendments,  suspension or termination of this Plan shall affect any
restriction  on or terms of any  previously  granted  Award made pursuant to the
Plan.  In  addition,  the Board  may,  from time to time,  amend the Plan in any
manner, but may not without shareholder approval adopt any amendment which would
(i) reprice  previously granted Options or cancel and reissue Options at a lower
exercise  price,  (ii) increase the  aggregate  number of shares of Common Stock
available  under the Plan (except by operation of Article  VIII) or (iii) modify
any provision of the Plan which would materially  increase the benefit or rights
of any  Participant  in the  Plan.  Amendments  to the  Plan may be  subject  to
approval by the  shareholders of the Company  pursuant to applicable  federal or
state law or rules  adopted by the New York Stock  Exchange  or any other  stock
exchange  or the  Nasdaq/National  Market  System  on which  the  shares  of the
Company's Common Stock may be listed from time to time.
 
     Section 9.2.  Withholding  Taxes. An Eligible Employee shall pay the amount
of taxes  required by law upon the exercise of an Option in cash or as otherwise
permitted in this Section 9.2.  Unless  otherwise paid by the  Participant,  the
Company shall be entitled to deduct from any payment under the Plan,  regardless
of the form of such payment,  the amount of all applicable income and employment
taxes required by law to be withheld with respect to such payment or may require
the  Participant to pay to it such tax prior to and as a condition of the making
of such payment. In accordance with any applicable  administrative guidelines it
establishes,  the Committee  may allow a Participant  to pay the amount of taxes
required by law to be  withheld  from an Award by (i)  directing  the Company to
withhold from any payment of the Award a number of shares of Common Stock having
a Fair Market  Value on the date of payment  equal to the amount of the required
withholding  taxes or (ii) delivering to the Company  previously owned shares of
Common  Stock  having a Fair  Market  Value on the date of payment  equal to the
amount   of  the   required   withholding   taxes;   provided,   the   foregoing
notwithstanding,  any payment made by the Participant  pursuant to either of the
foregoing  clauses (i) or (ii) shall not be  permitted  if it would result in an
accounting  charge with  respect to such  shares  used to pay such taxes  unless
otherwise approved by the Committee.
 
Section 9.3. Change of Control. Awards granted under the Plan to any Participant
shall be immediately and automatically vested, fully earned and exercisable, if
an Option, upon the occurrence of a Change of Control Event.
 
     Section 9.4.  Amendments to Awards. With the exception of repricing Options
or canceling and re-issuing Options at a lower exercise price, the Committee may
at any time unilaterally amend the terms of any Award Agreement,  whether or not
presently  exercisable or vested, to the extent it deems appropriate;  provided,
however,  that any such  amendment  which is  adverse to the  Participant  shall
require the  Participant's  consent.  An Option can be repriced or cancelled and
reissued at a lower exercise price only upon approval by the shareholders of the
Company.
 
     Section 9.5.  Regulatory  Approval and Listings.  The Company shall use its
best  efforts to file with the  Securities  and Exchange  Commission  as soon as
practicable following approval by the shareholders of the Company of the Plan as
provided  in  Section  1.2 of the  Plan,  and  keep  continuously  effective,  a
registration  statement  on Form S-8 with  respect  to shares  of  Common  Stock
subject to Awards hereunder.  Notwithstanding anything contained in this Plan to
the  contrary,  the Company  shall have no  obligation to issue shares of Common
Stock under this Plan prior to:
 
(a)               the obtaining of any approval from, or satisfaction of any
                  waiting period or other condition imposed by, any governmental
                  agency which the Committee shall, in its sole discretion,
                  determine to be necessary or advisable;
 
                                       12
<PAGE>
 
(b)               the admission of such shares to listing on the stock exchange
                  on which the Common Stock may be listed; and
 
(c)               the completion of any registration or other qualification of
                  such shares under any state or federal law or ruling of any
                  governmental body which the Committee shall, in its sole
                  discretion, determine to be necessary or advisable.
 
     If the  shares of Common  Stock  that have been  awarded  to a  Participant
pursuant to the provisions of the Plan are not  registered  under the Securities
Act,  pursuant  to  an  effective  registration  statement  on  Form  S-8,  such
Participant,  if the  Committee  shall deem it  advisable,  may be  required  to
represent  and agree in writing (y) that any shares of Common Stock  acquired by
the  Participant  pursuant  to the Plan will not be sold  except  pursuant to an
effective  registration  statement  under the Securities  Act, or pursuant to an
exemption  from  registration  under  the  Securities  Act,  and (z)  that  such
Participant has acquired such shares of Common Stock for the  Participant's  own
account and not with a view to the distribution thereof.
 
     Section 9.6. Right to Continued Employment or Service.  Nothing in the Plan
or in the  instruments  evidencing the grant of an Award under the Plan shall in
any  manner  be  construed  to limit in any way the  right of the  Company,  any
Subsidiary,  or any  Affiliated  Entity  to  terminate  an  Eligible  Employee's
employment  or the  right of the  shareholders  of the  Company  to  remove  any
Director  at any time,  or give any right to any person,  including  an Eligible
Employee,  to be or to remain  employed  by, or to serve as a  Director  of, the
Company,  a Subsidiary or any Affiliated Entity.  Further,  the adoption of this
Plan shall not be deemed to give any Eligible  Employee or any other individual,
other than a Non-Employee Director, any right to be selected as a Participant or
to be granted an Award.
 
     Section 9.7.  Compliance with Section 16(b). The Plan is intended to comply
with  all  applicable  conditions  of  Rule  16b-3  of  the  General  Rules  and
Regulations  under the Exchange  Act. All  transactions  involving the Company's
executive  officers and Directors are subject to such conditions,  regardless of
whether the conditions are expressly set forth in the Plan. Any provision of the
Plan that is contrary to a condition  of Rule 16b-3 shall not apply to executive
officers and Directors of the Company.
 
     Section 9.8.  Reliance on Reports.  Each member of the  Committee  and each
member of the Board shall be fully  justified in relying or acting in good faith
upon any report made by the  independent  public  accountants of the Company and
its Subsidiaries and upon any other information furnished in connection with the
Plan by any person or persons  other than himself or herself.  In no event shall
any person who is or shall have been a member of the  Committee  or of the Board
be liable for any  determination  made or other  action taken or any omission to
act in reliance  upon any such report or  information  or for any action  taken,
including the furnishing of information, or failure to act, if in good faith.
 
     Section 9.9. Construction.  Masculine pronouns and other words of masculine
gender  shall  refer to both men and  women.  The  titles  and  headings  of the
sections in the Plan are for the convenience of reference only, and in the event
of any  conflict,  the text of the Plan,  rather than such  titles or  headings,
shall control.
 
     Section  9.10.  Severability.  The  invalidity or  unenforceability  of any
provision of the Plan or an Award granted  pursuant  hereto shall not affect the
validity and enforceability of the remaining  provisions of the Plan and or such
Award.  The invalid or  unenforceable  provision shall be stricken to the extent
necessary to preserve the validity and  enforceability of the Plan and the Award
granted pursuant hereto.
 
Section 9.11. Governing Law. The Plan shall be governed by and construed in
accordance with the laws of the State of Texas, without regard to conflicts of
laws, except as superseded by applicable federal law.