UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Annual Long-Term Incentive Awards
On January 15, 2024, Diamond Offshore Drilling, Inc. (the “Company”) granted awards of restricted stock units (“RSUs”) under the Company’s 2021 Long-Term Stock Incentive Plan to certain of its key employees, including the following awards to the Company’s executive officers:
| Name |
Title |
Target Performance- Based RSUs Granted (#) |
Time-Based RSUs Granted (#) | |||
| Bernie Wolford, Jr. |
President and CEO | 129,083 | 86,056 | |||
| Dominic A. Savarino |
Senior Vice President and Chief Financial Officer | 52,589 | 35,060 | |||
| David L. Roland |
Senior Vice President, General Counsel and Secretary | 33,466 | 22,311 |
The awards consist of time-based RSUs that vest in equal amounts annually over a three-year period and a target number of performance-based RSUs that cliff vest based on achievement of absolute total shareholder return and relative total shareholder return compared to a designated group of companies, in each case over a three-year period.
Time-Based RSU Awards. The time-based RSUs vest and become non-forfeitable with respect to approximately 1/3 of the RSUs on each of January 15, 2025, January 15, 2026 and January 15, 2027, subject to the recipient’s continuous service or employment with the Company through the applicable vesting date. If the recipient is terminated for “cause” (as defined in the award agreement), all vested and unvested time-based RSUs will immediately be forfeited and cancelled for zero compensation. In connection with a “change in control” (as defined in the award agreement) in which the award is continued, assumed or replaced with an economically equivalent equity-based award that contains substantially comparable terms and conditions (a “Rollover Award”), the Rollover Award will vest in accordance with the schedule set forth above. In the case of a Rollover Award, upon the occurrence of a termination of the recipient’s service (i) by the Company without cause, (ii) by the recipient for “good reason” (as defined in the award agreement) or (iii) by reason of the recipient’s death or “disability” (as defined in the award agreement) (a “Qualifying Termination”) during the 12-month period following such change in control, such award will 100% vest and become non-forfeitable as of the date on which such Qualifying Termination occurred. In connection with a change in control in which the award does not become a Rollover Award, such award will 100% vest and become non-forfeitable as of the consummation of the change in control. Unless otherwise determined by the Compensation Committee of the Board of Directors, upon a termination of service for any other reason, all outstanding and unvested time-based RSUs will immediately be forfeited and cancelled for zero compensation. Any vested time-based RSUs may be settled by the Company in cash in lieu of stock.
Performance-Based RSU Awards. The performance-based RSUs cliff vest and become non-forfeitable based on the level of achievement of the Company’s (a) absolute total shareholder
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return (“TSR”) and (b) relative TSR, which measures the percentile ranking of the Company’s TSR as compared to the TSR of a group of companies designated in the award agreement, over the three-year period commencing on the grant date (unless terminated earlier as set forth in the award agreement) (the “Performance Period”), determined as follows:
| Relative TSR Percentile Ranking | ||||||||||
| <25th Percentile |
25th Percentile |
50th Percentile |
≥75th Percentile | |||||||
| Absolute TSR |
20% | 75% | 100% | 150% | 200% | |||||
| 15% | 50% | 75% | 125% | 175% | ||||||
| 10% | 0% | 50% | 100% | 150% | ||||||
| 7.5% | 0% | 25% | 75% | 100% | ||||||
| <7.5% | 0% | 0% | 50% | 75% | ||||||
|
Note: Points in between each level will be calculated using straight-line interpolation | ||||||||||
Vesting of the performance-based RSUs is subject to the recipient’s continuous service or employment with the Company through the end of the Performance Period.
If the recipient is terminated for “cause” (as defined in the award agreement), all vested and unvested performance-based RSUs will immediately be forfeited and cancelled for zero compensation. Upon the occurrence of a Qualifying Termination before the end of the Performance Period, a portion of the unvested performance-based RSUs will remain outstanding and eligible to vest as if the recipient had remained employed with the Company (without regard for the requirement that the recipient remain in continuous service through the end of the Performance Period). Such portion of performance-based RSUs that remain eligible to vest shall be determined by multiplying the target number of performance-based RSUs by a fraction, the numerator of which is the number of days the recipient was employed during the Performance Period and the denominator of which is the total number of days in the Performance Period. Any remaining performance-based RSUs that are ineligible to vest will immediately be forfeited and cancelled for zero compensation.
In connection with a change in control in which there is a Rollover Award, the Rollover Award will vest based on the level of achievement of the above performance metrics during the Performance Period as set forth above (subject to equitable adjustable to account for such change in control). In the case of a Rollover Award, upon the occurrence of a Qualifying Termination during the 12-month period following such change in control, then 100% of the target number of the unvested performance-based RSUs will vest and become non-forfeitable.
Upon the occurrence of a change in control in which the award does not become a Rollover Award, the Performance Period will terminate upon the consummation of the change in control and 100% of the target number of the unvested performance-based RSUs will vest and become non-forfeitable.
Upon the occurrence of a termination of service for any reason not described above, all outstanding and unvested performance-based RSUs will immediately be forfeited and cancelled for zero compensation. Any vested performance-based RSUs may be settled in cash in lieu of stock.
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This summary does not purport to be complete and is qualified in its entirety by reference to the complete text of the forms of Time-Vesting Restricted Stock Unit Award Agreement and Executive Performance-Vesting Restricted Stock Unit Award Agreement to be filed as exhibits to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: January 19, 2024 | DIAMOND OFFSHORE DRILLING, INC. | |||||
| By: | /s/ David L. Roland | |||||
| David L. Roland Senior Vice President, General Counsel and Secretary | ||||||
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