UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): MAY 23, 2005
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DIAMOND OFFSHORE DRILLING, INC.
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(Exact Name of Registrant as Specified in Charter)
DELAWARE 1-13926 76-0321760
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(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
15415 KATY FREEWAY
HOUSTON, TEXAS 77094
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(Address of Principal Executive Offices and Zip Code)
Registrant's telephone number, including area code: (281) 492-5300
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NOT APPLICABLE
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(Former name or former address, if changed since last report)
Check the appropriate line 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))
INFORMATION TO BE INCLUDED IN THE REPORT
ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
At the Annual Meeting of Stockholders of Diamond Offshore Drilling,
Inc. (the "Company") held on May 23, 2005 (the "Annual Meeting"), the Company's
stockholders approved the Second Amended and Restated Diamond Offshore Drilling,
Inc. 2000 Stock Option Plan, effective as of May 23, 2005. The principal change
effected by the amendments to such plan is to provide for authority to award
stock appreciation rights either in tandem with or separate from stock option
grants. In addition, authority to administer the Stock Option Plan with respect
to certain executive officers was vested in the Incentive Compensation Committee
of the Company's Board of Directors. This summary of the amendments to such plan
does not purport to be complete and is qualified in its entirety by reference to
the complete text of the plan which is filed as Exhibit 10.1 to this report.
At the Annual Meeting, the Company's stockholders also approved the
Diamond Offshore Drilling, Inc. Incentive Compensation Plan for Executive
Officers (the "Incentive Compensation Plan"). The Incentive Compensation Plan,
which is effective as of January 1, 2005, is designed to qualify the amounts
paid under its terms to the Company's executive officers as "qualified
performance-based compensation" under Section 162(m) of the Internal Revenue
Code of 1986, as amended (together with the regulations promulgated thereunder,
as each may be amended, the "Code"). This qualification will allow amounts
awarded under the Incentive Compensation Plan to be deductible by the Company
for federal income tax purposes, even if, when combined with other compensation,
the award causes the compensation of any of the participants to exceed $1
million.
The Incentive Compensation Plan grants to the Incentive Compensation
Committee (the "Committee") discretionary authority to reduce an award otherwise
determined pursuant to the Incentive Compensation Plan and discretion to take
into account specific factors that may impact the Company's business in
determining the performance measure, called the "Performance Based Amount," on
which awards under the Incentive Compensation Plan are based.
The material features of the Incentive Compensation Plan are summarized
below. This summary does not purport to be complete and is qualified in its
entirety by reference to the complete text of the Incentive Compensation Plan
which is filed as Exhibit 10.2 to this report.
Eligibility. All executive officers of the Company (currently nine
persons) are eligible to participate in the Incentive Compensation Plan. The
Committee has the sole authority to designate which executive officers are to
participate in the Incentive Compensation Plan.
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Designation of Awards. Within the first 90 days of each calendar year
(the "Designation Period"), the Committee may designate one or more executive
officers of the Company (each, a "Participant") to participate in the Incentive
Compensation Plan for specified calendar years (each, a "Performance Period").
The Committee may designate awards for future Performance Periods (a "Multiple
Award Period").
Prior to the end of the Designation Period for a Performance Period,
the Committee will allocate, on behalf of each Participant, a percentage of the
Performance Based Amount for that Performance Period on which the Participant's
award will be based. The Performance Based Amount is the aggregate amount of the
performance awards determined for the Performance Period, based on the objective
performance goals established by the Committee for the Performance Period prior
to the end of the Designation Period. The performance goals will be stated as
specific amounts of, or specific changes in, one or more of the financial
measures set forth in the Incentive Compensation Plan, including EBITDA;
revenues; earnings, including operating earnings; earnings per share, including
operating earnings per share; stockholders' equity; return on equity; assets;
return on assets; capital; return on capital; book value; operating margins;
cash flow; stockholder return; expenses; expense ratios; loss ratios;
debt-to-capital ratio; or market share. The Committee may specify any reasonable
definition of the financial measures it uses.
In the event of a Multiple Award Period, prior to the end of the first
Designation Period for all included Performance Periods the Committee will
allocate on behalf of each Participant a percentage of the Performance Based
Amount for each Performance Period within the Multiple Award Period, or, in the
alternative, an aggregate formula for the later Performance Periods within the
Multiple Award Period based on the total of assigned percentages of Performance
Based Amount for the then current and the prior Performance Periods included in
the Multiple Award Period. The Committee may make an award for a Performance
Period to a Participant who has received an award for a Multiple Award Period
which includes that Performance Period, provided that this is done prior to the
end of the Designation Period for that Performance Period.
Reduction of Awards. At the time that an award is allocated to a
Participant, the Committee may, in its discretion, determine to reserve the
authority to reduce the amount payable to a Participant below the percentage of
the Performance Based Amount allocated to such Participant. This so-called
"negative discretion" may be applied by the Committee, in its discretion, at the
time the Performance Based Amount for the applicable Performance Period has been
determined.
Deferral of Payments. Subject to the applicable provisions of the Code,
the Committee may, in its discretion, permit Participants to elect to defer
payment of all or part of any award, together with interest accrued from the
originally scheduled payment date.
Termination of Employment. If any Participant ceases to be employed by
the Company or its subsidiaries prior to the end of a Performance Period (other
than due to retirement, death or disability), that Participant will not be
eligible to receive a bonus
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award for that Performance Period unless the Committee determines that payment
of the award is in the Company's best interest. Participants who cease to be
employed by the Company or its subsidiaries prior to the end of a Performance
Period due to retirement, death or disability will receive an award prorated to
the date of cessation of employment.
Amendments and Termination. The Committee may amend the Incentive
Compensation Plan at any time, provided that changes may be made only if they
are consistent with the provisions of the Code and do not adversely affect the
ability of the Company to deduct the compensation which may be paid pursuant to
the Incentive Compensation Plan for federal income tax purposes. No amendment
that requires stockholder approval under the Code may be made without that
approval. The Board of Directors may terminate the Incentive Compensation Plan
at any time.
The Committee has established the annual incentive awards for the 2005
Performance Period (the "2005 Awards") under the Incentive Compensation Plan
based on the results of the Company's drilling operations, specifically, the
percentage of the Company's actual EBITDA (as defined by the Committee) for 2005
compared to the average of the Company's budgeted EBITDA for 2005 and the
Company's actual EBITDA for 2004. Each Participant has an incentive target that
is a percentage of the Participant's eligible base salary, and in no event will
the amount available for such Participant exceed the product of the
Participant's incentive target and eligible base salary. In accordance with the
Incentive Compensation Plan, the Committee has retained negative discretion to
reduce any 2005 Award payable to any of these executive officers.
The incentive targets established under the Incentive Compensation Plan
for each of the Participants for the 2005 Performance Period are set forth in
the table below:
Incentive Target
As Percentage of
Name Title Eligible Base Salary
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James S. Tisch Chairman of the Board and 60%
Chief Executive Officer
Lawrence R. Dickerson President and Chief Operating Officer 60%
David W. Williams Executive Vice President 60%
Rodney W. Eads Senior Vice President - Worldwide 50%
Operations
John L. Gabriel, Jr. Senior Vice President - Contracts 50%
and Marketing
John M. Vecchio Senior Vice President - Technical 50%
Services
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ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits.
Exhibit number Description
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10.1 Second Amended and Restated Diamond Offshore Drilling,
Inc. 2000 Stock Option Plan (incorporated by reference to
Exhibit A attached to the Company's definitive proxy
statement on Schedule 14A filed with the Securities and
Exchange Commission on March 31, 2005)
10.2 Diamond Offshore Drilling, Inc. Incentive Compensation
Plan for Executive Officers (incorporated by reference to
Exhibit B attached to the Company's definitive proxy
statement on Schedule 14A filed with the Securities and
Exchange Commission on March 31, 2005)
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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.
Diamond Offshore Drilling, Inc.
By: /s/ William C. Long
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William C. Long
Vice President, General Counsel and Secretary
Dated: May 27, 2005
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EXHIBIT INDEX
Exhibit number Description
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10.1 Second Amended and Restated Diamond Offshore
Drilling, Inc. 2000 Stock Option Plan (incorporated
by reference to Exhibit A attached to the Company's
definitive proxy statement on Schedule 14A filed with
the Securities and Exchange Commission on
March 31, 2005)
10.2 Diamond Offshore Drilling, Inc. Incentive
Compensation Plan for Executive Officers
(incorporated by reference to Exhibit B attached to
the Company's definitive proxy statement on Schedule
14A filed with the Securities and Exchange Commission
on March 31, 2005)
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