UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

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): June 29, 2018

 

 

Diamond Offshore Drilling, Inc.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   1-13926   76-0321760

(State or other jurisdiction

of incorporation)

 

(Commission

file number)

 

(I.R.S. Employer

Identification No.)

15415 Katy Freeway

Houston, Texas 77094

(Address of principal executive offices, including Zip Code)

(281) 492-5300

(Registrant’s telephone number, including area code)

 

 

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))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

Appointment of Chief Financial Officer

On July 2, 2018, Diamond Offshore Drilling, Inc. (the “Company”) announced the appointment of Scott L. Kornblau as the Company’s Senior Vice President and Chief Financial Officer, effective on July 1, 2018. Previously, Mr. Kornblau, age 46, held the position of Vice President and Treasurer of the Company since January 2017, and he has served as the Company’s acting Chief Financial Officer since December 2017. Mr. Kornblau was appointed Treasurer of the Company in 2007, after joining the Company in 1997 as Senior Accountant and serving in numerous finance and accounting positions.

In connection with Mr. Kornblau’s appointment, the Compensation Committee of the Company’s Board of Directors approved the following changes to Mr. Kornblau’s compensation:

 

  (i) Mr. Kornblau’s annual base salary was increased to $410,000 effective with the first pay period following the effective date of his appointment;

 

  (ii) On July 1, 2018, the Company granted to Mr. Kornblau restricted stock units (“RSUs”) under the Company’s Equity Incentive Compensation Plan with an aggregate value of $87,500, of which (a) 60% of the RSUs granted will cliff vest subject to the Company’s level of achievement towards a specified financial target for each of 2018, 2019 and 2020 and subject further to the negative discretion of the Compensation Committee to reduce the number of the RSUs that would otherwise be eligible to vest and (b) 40% of the RSUs granted will separately time-vest in equal installments on the second and third anniversaries of the grant date; and

 

  (iii) On July 1, 2018, the Company granted to Mr. Kornblau cash incentive awards under the Company’s Incentive Compensation Plan (Amended and Restated as of January 1, 2018, as amended on June 28, 2018) with an aggregate value of $87,500, of which (a) 60% of the cash incentive awards granted will cliff vest subject to the Company’s level of achievement towards a specified financial target for each of 2018, 2019 and 2020 and subject further to the negative discretion of the Compensation Committee to reduce the amount of the cash incentive awards that would otherwise be eligible to vest and (b) 40% of the cash incentive awards granted will separately time-vest in equal installments on the second and third anniversaries of the grant date.

Executive Retention Agreement

On June 29, 2018, the Company granted an executive retention award to Ronald Woll, the Company’s Senior Vice President and Chief Commercial Officer, after approval by the Compensation Committee of the Board of Directors of the Company, to be paid in accordance with the terms of an Executive Retention Agreement (the “Retention Agreement”) between

 

2

Mr. Woll and the Company. Pursuant to the Retention Agreement, the Company will pay Mr. Woll a one-time retention payment of $750,000, less applicable withholdings, if Mr. Woll remains actively employed in Good Standing (as defined below) through January 1, 2020 and further through the payment of the retention payment. The Retention Agreement provides that Mr. Woll will be deemed to be in “Good Standing” if he (i) has remained actively employed by the Company or its subsidiary from the date of the Retention Agreement through the payment date of the retention payment, not on a leave of any kind (other than a legally protected leave) and not subject to any performance improvement plan and (ii) has remained at all times in full compliance with all agreements between him and the Company and/or its subsidiaries and all policies of the Company and its subsidiaries. If earned, the retention payment will be paid in a lump sum in cash on or before March 1, 2020.

The foregoing description of the Retention Agreement does not purport to be complete and is qualified in its entirety by the full text of the Retention Agreement, a copy of which is filed as Exhibit 10.1 and incorporated by reference herein.

 

Item 7.01. Regulation FD Disclosure

On July 2, 2018, the Company issued a press release describing the appointment of Mr. Kornblau as its Senior Vice President and Chief Financial Officer. A copy of the press release is furnished as Exhibit 99.1 hereto.

The information contained in Item 7.01 and Exhibit 99.1 of this Current Report on Form 8-K (i) is not to be considered “filed” under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and (ii) shall not be incorporated by reference into any previous or future filings made by or to be made by the Company with the SEC under the Securities Act of 1933, as amended, or the Exchange Act.

 

Item 9.01. Financial Statements and Exhibits

 

(d) Exhibits.

 

Exhibit

number

  

Description

10.1    Executive Retention Agreement, dated June 29, 2018, between Diamond Offshore Drilling, Inc. and Ronald Woll
99.1    Press Release dated July 2, 2018

 

3

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: July 2, 2018     DIAMOND OFFSHORE DRILLING, INC.
    By:  

/s/ DAVID L. ROLAND

      David L. Roland
     

Senior Vice President, General Counsel

and Secretary

 

4

Exhibit 10.1

EXECUTIVE RETENTION AGREEMENT

THIS EXECUTIVE RETENTION AGREEMENT (this “ Agreement ”) is made as of June 29, 2018 by and between Diamond Offshore Drilling, Inc. (the “ Company ”) and Ronald Woll (the “ Executive ”).

 

1. Retention Payment . The Executive shall be entitled to receive a Retention Payment (the “ Retention Payment ”) in an amount equal to $750,000, less withholdings and deductions in accordance with applicable law, subject to the terms and conditions set forth in this Agreement. Provided the Executive remains actively employed in Good Standing (as defined below) with the Company from the date of this Agreement through January 1, 2020 and further through the payment of the Retention Payment, the Executive will receive the Retention Payment. If earned, the Retention Payment shall be paid in a single lump sum payment no later than March 1, 2020.

For purposes of this Agreement, “ Good Standing ” shall mean the Executive has, in the sole and absolute discretion of the Company’s Compensation Committee:

 

  a. remained actively employed by the Company from the date of this Agreement through the payment date, not on a leave of any kind (other than a legally protected leave) and not subject to any performance improvement plan; and

 

  b. remained at all times in full compliance with all agreements between the Executive and the Company and/or any entity in which the Company directly or indirectly owns more than 50% of the outstanding equity or other ownership interests (each, a “ Subsidiary ”) and all policies of the Company and its Subsidiaries.

Notwithstanding any provision herein to the contrary, the Company shall have no obligation to make a Retention Payment if the Executive’s employment with the Company terminates for any reason prior to the date of payment of the Retention Payment, the Executive is not in Good Standing through such date of payment or the Executive has on or before such date of payment served notice to terminate his employment.

 

2. Successors; Binding Agreement . This Agreement shall be binding upon and shall inure to the benefit of the Company and its successors and assigns, and the Company shall have the right to assign its obligations under this Agreement, in whole or in part, to any successor employer or its affiliates, in which case the Company shall have no further liability with respect to the assigned obligations pursuant to this Agreement. To the extent that this Agreement is assigned to a successor employer, the Compensation Committee’s role as described in Section 1 shall be replaced by an appropriate body as designated by the successor employer, and the Company shall have no further liability with respect to this Agreement.

 

1

3. Non-exclusivity of Rights . Nothing in this Agreement shall prevent or limit the Executive’s continuing or future participation in any benefit, bonus, incentive or other plan or program provided by the Company and for which the Executive may qualify, nor shall anything herein limit or reduce such rights as the Executive may have under any other agreements with the Company.

 

4. No Guaranteed Employment . Notwithstanding any provision herein to the contrary, no provision in this Agreement shall be interpreted to obligate the Company to retain the Executive in its employ for any period of time or to interfere with or limit in any way the right of the Company to terminate the Executive’s employment. Nothing contained in this Agreement and no action taken pursuant to the provisions of this Agreement shall create or be considered to create a trust or fund of any kind or fiduciary relationship between the Company or any successor employer or any of its affiliates and the Executive or a security interest of any kind in any property of the Company or any successor employer or any of its affiliates in favor of the Executive or any other person. The Executive and the Company acknowledge that, except 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 may be terminated by either the Executive or the Company at any time. The terms of this Agreement are not intended to and should not be construed as providing a guarantee of employment for a specific term or length of time.

 

5. Consent . By executing this Agreement, the Executive hereby approves and consents to the terms of the Agreement.

 

6. Miscellaneous . The Executive will not be eligible to accelerate or defer the Retention Payment for any reason. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by the Executive and the Company or, in the event of assignment, the successor employer. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreement or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not expressly set forth in this Agreement.

 

7.

Section  409A Considerations . All of the payments and benefits payable pursuant to this Agreement are intended to comply with, or be exempt from, Internal Revenue Code Section 409A (including, but not limited to, any future amendments to Internal Revenue Code Section 409A, and any other Internal Revenue Service or other governmental rulings, regulations or interpretations (collectively, “ Section  409A ”)) to the extent the requirements of Section 409A are applicable hereto, and the provisions of this Agreement shall be construed and administered in a manner consistent with that intention. Notwithstanding anything herein to the contrary, (i) if at the time of Executive’s termination of employment with the Company, Executive is a “specified employee” as defined in Section 409A, and the deferral of the commencement of any payments or

 

2

  benefits otherwise payable hereunder as a result of such termination of employment is necessary in order to prevent any accelerated or additional tax under Section 409A, then the Company will defer the commencement of the payment of any such payments or benefits hereunder (without any reduction in such payments or benefits ultimately paid or provided to Executive) to the extent necessary to comply with the requirements of Section 409A until the first business day that is more than six (6) months following Executive’s termination of employment with the Company (or the earliest date as is permitted under Section 409A) and (ii) if any other payments of money or other benefits due to Executive hereunder could cause the application of an accelerated or additional tax under Section 409A, such payments or other benefits shall be deferred if deferral will make such payment or other benefits compliant under Section 409A, or otherwise such payment or other benefits shall be restructured, to the extent possible, in a manner, determined by the Company’s Compensation Committee or the Company’s Board of Directors, that does not cause such an accelerated or additional tax. In the event that payments under this Agreement are deferred pursuant to this paragraph in order to prevent any accelerated tax or additional tax under Section 409A, then such payments shall be paid at the time specified hereunder without any interest thereon. For purposes of Section 409A, each payment made under this Agreement shall be designated as a “separate payment” within the meaning of Section 409A. Without limiting the foregoing, the terms “terminates” or “termination of employment” or similar terms used in this Agreement shall be interpreted to mean to occur when a “separation of service” occurs as defined under Section 409A.

 

8. Governing Law . This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Texas without giving effect to the conflict of laws principles thereof. Any action brought by any party to this Agreement shall be brought and maintained in a court of competent jurisdiction in the State of Texas and Executive and the Company hereby consent to the personal jurisdiction in the State of Texas of all such actions.

 

9. Severability . The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof.

 

10. Entire Agreement . This Agreement constitutes the entire agreement between the parties hereto and supersedes all prior agreements, if any, understandings and arrangements, oral or written, between the parties hereto with respect to the subject matter hereof except that any non-solicitation, confidentiality and/or return of property agreements between the parties are not superseded but expressly preserved by this Agreement.

 

11. Counterparts . This Agreement may be executed in any number of counterparts, each of which shall be deemed an original but all such counterparts shall together constitute one and the same instrument.

 

3

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer and the Executive has executed this Agreement as of the day and year first above written.

 

DIAMOND OFFSHORE DRILLING, INC.
By:  

/s/ Aaron Sobel

  Aaron Sobel
  Vice President, Human Resources
EXECUTIVE

/s/ Ronald Woll

Ronald Woll

 

4

Exhibit 99.1

 

LOGO    

Contact:

 

Samir Ali

Vice President, Investor Relations &

Corporate Development

+1 (281) 647-4035

Diamond Offshore Appoints Scott Kornblau as Senior Vice President and Chief Financial Officer

HOUSTON, July  2, 2018 — Diamond Offshore Drilling, Inc. (NYSE: DO) today announced that Scott Kornblau has been appointed Senior Vice President and Chief Financial Officer, effective immediately.

Mr. Kornblau has over 20 years of finance and accounting expertise working in the energy industry. Mr. Kornblau joined the Company in 1997 as Senior Accountant and has served in several finance and accounting leadership positions since. Most recently, Mr. Kornblau held the acting Chief Financial Officer role in addition to his Vice President and Treasurer position at the Company.

ABOUT DIAMOND OFFSHORE

Diamond Offshore is a leader in offshore drilling, providing contract drilling services to the energy industry around the globe. Additional information and access to the Company’s SEC filings are available at www.diamondoffshore.com. Diamond Offshore is owned 53% by Loews Corporation (NYSE: L).

# # #