UNITED STATES
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ENSCO International Incorporated |
(Exact name of registrant as specified in its charter) |
Delaware | 1-8097 | 76-0232579 |
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(State or other jurisdiction of incorporation |
(Commission File Number) | (I.R.S. Employer Identification No.) |
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500 North Akard Street Suite 4300 Dallas, Texas 75201-3331 |
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(Address of Principal Executive Offices and Zip Code) |
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Not Applicable |
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(Former name or former address, if changed since last report) | ||||||||
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material
pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant
to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant
to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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TABLE OF CONTENTS |
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Under the LTIP,
if a participant was granted a Performance Unit Award for a Performance Period (as defined in the
LTIP) and his or her employment with the Company terminates during the Performance Period by reason of death,
permanent or total disability or retirement, the specific targets related to the participant's Performance Goals
for that period will be deemed to have been achieved to the target level of performance. If a participant
resigns before his or her normal retirement age or is terminated for any reason before the participant's
Performance Unit Award is certified by the Committee, he or she will forfeit all unpaid amounts under the LTIP.
Notwithstanding the foregoing, if a participant's employment is terminated without cause or the participant
resigns for good reason within the two-year period following a change in control of the Company, the specific
targets related to the participant's Performance Goals for that period will be deemed to have been achieved to
the target level of performance. Breaches by a participant of the Company's Code of Business Conduct (Ethics)
Policy and certain other violations could result in disqualification of a participant from earning the
Performance Unit Awards or receiving payments thereunder. |
The foregoing summary
is not complete and is qualified in its entirety by reference to the LTIP, a copy of which
is attached as Exhibit 10.5 to this Current Report on Form 8-K and incorporated into this report by reference. |
As respects
the initial Performance Unit Awards, the Executive Compensation Subcommittee of the Committee decided
to implement the three-year cycle so that the Performance Unit Award payments would commence on a scaled basis
during 2010. As respects the Chief Executive Officer, the awards were approved by the Executive Compensation
Subcommittee on November 3, 2009, following consultation with, and concurrence by, the Company's independent
directors in accordance with the provisions of the Committee Charter. |
On November 3, 2009,
the Executive Compensation Subcommittee of the Committee established the Performance
Period, Performance Goals and amounts of three Performance Unit Awards under the LTIP for certain executive officers
of the Company, including Messrs. Daniel W. Rabun, William S. Chadwick, Jr. and James W. Swent III. The
Performance Unit Awards are based on TSR and ROCE. The first Performance Unit Awards were granted under the LTIP
for the Performance Period beginning January 1, 2007 and ending December 31, 2009 as follows: |
Performance Unit Awards (Performance Period of January 1, 2007 - December 31, 2009) |
Measure | Weight | Threshold | Target | Maximum | |
Relative TSR(1)(3) |
50% |
Rank Award Multiplier Award $ (Mr. Rabun) Award $ (Mr. Chadwick) Award $ (Mr. Swent) |
9 of 11 0.25 $69,750 $47,313 $25,417 |
6 of 11 1.00 $279,000 $189,250 $101,667 |
1 of 11 2.33 $650,070 $440,953 $236,883 |
Relative ROCE(2)(3) |
25% |
Rank Award Multiplier Award $ (Mr. Rabun) Award $ (Mr. Chadwick) Award $ (Mr. Swent) |
9 of 11 0.25 $34,875 $23,656 $12,708 |
6 of 11 1.00 $139,500 $94,625 $50,833 |
1 of 11 2.33 $325,035 $220,476 $118,442 |
Absolute ROCE(2) |
25% |
Percentage Achieved Award Multiplier Award $ (Mr. Rabun) Award $ (Mr. Chadwick) Award $ (Mr. Swent) |
8% 0.00 $0 $0 $0 |
12% 1.00 $139,500 $94,625 $50,833 |
>18% 2.33 $325,035 $220,476 $118,442 |
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The second Performance Unit Awards were granted under the LTIP for the Performance Period beginning January 1, 2008 and ending December 31, 2010 as follows: |
Performance Unit Awards (Performance Period of January 1, 2008 - December 31, 2010) |
Measure | Weight | Threshold | Target | Maximum | |
Relative TSR(1)(3) |
50% |
Rank Award Multiplier Award $ (Mr. Rabun) Award $ (Mr. Chadwick) Award $ (Mr. Swent) |
9 of 11 0.25 $139,500 $94,625 $50,833 |
6 of 11 1.00 $558,000 $378,500 $203,333 |
1 of 11 2.33 $1,300,140 $881,905 $473,767 |
Relative ROCE(2)(3) |
25% |
Rank Award Multiplier Award $ (Mr. Rabun) Award $ (Mr. Chadwick) Award $ (Mr. Swent) |
9 of 11 0.25 $69,750 $47,313 $25,417 |
6 of 11 1.00 $279,000 $189,250 $101,667 |
1 of 11 2.33 $650,070 $440,953 $236,883 |
Absolute ROCE(2) |
25% |
Percentage Achieved Award Multiplier Award $ (Mr. Rabun) Award $ (Mr. Chadwick) Award $ (Mr. Swent) |
8% 0.00 $0 $0 $0 |
12% 1.00 $279,000 $189,250 $101,667 |
>18% 2.33 $650,070 $440,953 $236,883 |
The third Performance Unit Awards were granted under the LTIP for the Performance Period beginning January 1, 2009 and ending December 31, 2011 as follows: |
Performance Unit Awards (Performance Period of January 1, 2009 - December 31, 2011) |
Measure | Weight | Threshold | Target | Maximum | |
Relative TSR(1)(3) |
50% |
Rank Award Multiplier Award $ (Mr. Rabun) Award $ (Mr. Chadwick) Award $ (Mr. Swent) |
9 of 11 0.25 $209,250 $141,938 $76,250 |
6 of 11 1.00 $837,000 $567,750 $305,000 |
1 of 11 2.33 $1,950,210 $1,322,858 $710,650 |
Relative ROCE(2)(3) |
25% |
Rank Award Multiplier Award $ (Mr. Rabun) Award $ (Mr. Chadwick) Award $ (Mr. Swent) |
9 of 11 0.25 $104,625 $70,969 $38,125 |
6 of 11 1.00 $418,500 $283,875 $152,500 |
1 of 11 2.33 $975,105 $661,429 $355,325 |
Absolute ROCE(2) |
25% |
Percentage Achieved Award Multiplier Award $ (Mr. Rabun) Award $ (Mr. Chadwick) Award $ (Mr. Swent) |
8% 0.00 $0 $0 $0 |
12% 1.00 $418,500 $283,875 $152,500 |
>18% 2.33 $975,105 $661,429 $355,325 |
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(1) | Total Stockholder Return (TSR) is defined as (i) dividends paid during the Performance Period plus the ending share price of the Performance Period minus the beginning share price of the Performance Period, (ii) divided by the beginning share price of the Performance Period. Beginning and ending share prices are based on the average closing prices during the quarter preceding the Performance Period and the final quarter of the Performance Period. |
(2) | Return on capital employed (ROCE) is defined as (i) net income, adjusted for any nonrecurring gains and losses, plus after-tax net interest expense, divided by (ii) total equity as of January 1 of the respective year plus the average of the long-term debt balances as of January 1 and December 31 of the respective year. |
(3) | The Company's relative performance will be evaluated against a group of 10 peer companies, consisting of Atwood Oceanics, Inc., Diamond Offshore Drilling, Inc., Helmerich & Payne, Inc., Hercules Offshore, Inc., Nabors Industries Ltd., Noble Corporation, Parker Drilling Company, Pride International, Inc., Rowan Companies, Inc. and Transocean Ltd. If the group decreases in size during the Performance Period, as a result of mergers, acquisitions or economic conditions, the following table will be used to determine the appropriate multiplier to be applied to the target award amount for the two relative Performance Goals. |
Rank Against Peers |
Multiplier (10 Peers) |
Multiplier (9 Peers) |
Multiplier (8 Peers) |
Multiplier (7 Peers) |
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1 | 2.33 | 2.33 | 2.33 | 2.33 | |
2 | 2.04 | 2.00 | 2.00 | 1.95 | |
3 | 1.78 | 1.70 | 1.66 | 1.55 | |
4 | 1.52 | 1.40 | 1.33 | 1.15 | |
5 | 1.26 | 1.10 | 1.00 | 0.85 | |
6 | 1.00 | 0.90 | 0.70 | 0.425 | |
7 | 0.75 | 0.60 | 0.35 | 0.00 | |
8 | 0.50 | 0.30 | 0.00 | 0.00 | |
9 | 0.25 | 0.00 | 0.00 | ||
10 | 0.00 | 0.00 | |||
11 | 0.00 |
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Exhibit Number |
10.1 | ENSCO International Incorporated Form of Indemnification Agreement with Non-Employee Directors. |
10.2 | ENSCO International Incorporated Form of Indemnification Agreement with Executive Officers. |
10.3 | ENSCO International Incorporated Form of Indemnification Agreement with Daniel W. Rabun. |
10.4 | ENSCO International Incorporated Form of Indemnification Agreement with John Mark Burns. |
10.5 | ENSCO International Incorporated 2005 Long-Term Incentive Plan, as Revised and Restated for Amendments Effective as of November 3, 2009. |
10.6 | Form of Ensco Performance-Based Long-Term Incentive Award Summary. |
10.7 | Form of ENSCO International Incorporated 2005 Long-Term Incentive Award Terms and Conditions and Acceptance Agreement |
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ENSCO International Incorporated | ||
/s/ CARY A. MOOMJIAN, JR.
Cary A. Moomjian, Jr. Vice President, General Counsel and Secretary | ||
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EXHIBIT INDEX |
Exhibit No. | Description | |
10.1 | ENSCO International Incorporated Form of Indemnification Agreement with Non-Employee Directors. |
10.2 | ENSCO International Incorporated Form of Indemnification Agreement with Executive Officers. |
10.3 | ENSCO International Incorporated Form of Indemnification Agreement with Daniel W. Rabun. |
10.4 | ENSCO International Incorporated Form of Indemnification Agreement with John Mark Burns. |
10.5 | ENSCO International Incorporated 2005 Long-Term Incentive Plan, as Revised and Restated for Amendments Effective as of November 3, 2009. |
10.6 | Form of Ensco Performance-Based Long-Term Incentive Award Summary. |
10.7 | Form of ENSCO International Incorporated 2005 Long-Term Incentive Award Terms and Conditions and Acceptance Agreement. |
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