UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the registrant þ Filed by a party other than the registrant o
Check the appropriate box:
| o | Preliminary Proxy Statement | ||||
| o | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | ||||
| þ | Definitive Proxy Statement | ||||
| o | Definitive Additional Materials | ||||
| o | Soliciting Material | ||||
Valaris plc
Limited
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of filing fee (Check the appropriate box)all boxes that apply):
| þ | No fee required | |||||||
| o | Fee paid previously with preliminary | ||||
| o | Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11 | |||||||
  | Valaris 2 Church Street Phone: www.valaris.com | |||||
NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS
to be held on 158 June 20202022
The Annual General Meeting of Shareholders of Valaris plcLimited ("Valaris," "we," "us," "our" or the "Company") will be held in the Rooftop Room at 110 Cannon Street, London EC4N 6EU, United Kingdom,The Loren at 12:Pink Beach, 116 South Shore Road, Tucker's Town, Smiths HS 01, Bermuda, at 8:00 p.m. Londona.m. Bermuda time and 6:00 a.m. Houston time, on 158 June 20202022 (the "Meeting").
1.To elect by way of Coronavirus (COVID-19) onseparate resolutions, the Meeting
2.To approve the appointment of KPMG LLP as our independent registered public accounting firm until the close of the 2023 Annual General Meeting of Shareholders and to authorize the Board of Directors of the Company (the "Board"), acting by its Audit Committee, to set KPMG LLP's remuneration.
3.To approve on a non-binding, advisory basis, the compensation of our named executive officers.
Shareholders may also be asked to consider and vote on such other business as their proxy rather thanmay properly come before the Meeting and any adjournment or postponement thereof. The Company's annual audited financial statements for the year ended 31 December 2021 will also be available at the Meeting and are included in our 2021 annual report to shareholders.
The Board has fixed the close of business on 13 April 2022 as the record date for the determination of the shareholders entitled to receive notice and to vote at the Meeting or any adjournment or postponement thereof. You must be a named person who will not be permittedshareholder of record as of the close of business on the record date to attend and vote at the Meeting and any adjournment or postponement thereof. Even if you plan to attend the Meeting.
For resolutions 1 and where appropriate, by filings with the Securities & Exchange Commission (the "SEC").
With respect to the non-binding, advisory votesvote on Resolutions 7, 8 and 9,resolution 3 regarding (respectively) the Directors' Remuneration Report, the compensation of our named executive officers, and the U.K. statutory reports and accounts, the result of the vote will not require the Board of Directors or any committee thereof to take any action. However, our Board of Directors values the opinions of our shareholders as expressed through their advisory votes on such non-binding resolutions and other communications. Accordingly, the Board of Directors will carefully consider the outcome of the advisory votesvote on Resolutions 7,resolution 3.
Important notice regarding the availability of proxy materials for the Meeting to be held on 8 June 2022: The Proxy Statement, our 2021 annual report to shareholders and 9.proxy card are available without charge at www.proxyvote.com.
We are monitoring developments regarding the ongoing COVID-19 pandemic and preparing in the event any modifications to the Meeting are necessary or appropriate. If we determine to make any change to the date, time, location or procedure of the Meeting, we will announce such changes in advance.
Please review the proxy statement accompanying this notice for more complete information regarding the Meeting and the full text of the resolutions to be proposed at the Meeting.
By Order of the Board of Directors,
Chief Executive Officer
19 April 2022
TABLE OF CONTENTS
RESOLUTION 2 | |||||
PROXY STATEMENT SUMMARY
Time and Date: 12:8:00 p.m. Londona.m. Bermuda time
Place: 110 Cannon Street London EC4N 6EURooftop Room atThe Loren at Pink Beach, 116 South Shore Road, Tucker's Town, Smiths
HS 01, Bermuda
HS 01, Bermuda
Meeting Date: 158 June 20202022
Record Date: 23 March 202013 April 2022
Voting Cutoff Date: 3:00 p.m. Eastern Time on 127 June 20202022
Voting Matters and Board Recommendations
| Election of Directors | FOR each Nominee | ||||
| Approve appointment of KPMG LLP as Independent Auditors and to authorize the | |||||
| FOR | |||||
| Advisory Vote to Approve Named Executive Officer Compensation | FOR | ||||
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Board Nominees
| Name | Age | Director Since | Principal Occupation | Independent | ||||||||||
| Anton Dibowitz | 50 | 2021 | President and Chief Executive Officer of Valaris | No | ||||||||||
| Gunnar Eliassen | 36 | N/A | Investment Director at Seatankers Services (UK) LLP | Yes | ||||||||||
| Dick Fagerstal | 61 | 2021 | Executive Chairman of Global Marine Group | Yes | ||||||||||
| Joseph Goldschmid | 36 | 2021 | Managing Director, Oak Hill Advisors, L.P. | Yes | ||||||||||
| Elizabeth D. Leykum | 43 | 2021 | Founder of Serenade Capital LLC | Yes | ||||||||||
| Deepak Munganahalli | 52 | 2021 | Co-founder of JOULON | No | ||||||||||
| James W. Swent, III | 71 | 2021 | Former Chairman, President and Chief Executive Officer of Southcross Energy Partners, L.P. | Yes | ||||||||||
| Name | Age | Director Since | Principal Occupation | Independent (Yes/No) |
| William E. Albrecht | 68 | 2019 | Non-Executive Chairman of the Board of California Resources Corporation | Yes |
| Frederick Arnold | 66 | 2019 | Former Financial Executive (Retired) | Yes |
| Thomas P. Burke | 52 | 2019 | President and Chief Executive Officer of Valaris plc | No |
| Mary E. Francis CBE | 71 | 2013 | Former Senior Civil Servant in British Treasury and Prime Minister's Office (Retired) | Yes |
| Georges J. Lambert | 42 | 2019 | Former Partner and Senior Vice President of The Capital Group (Retired) | Yes |
| Suzanne P. Nimocks | 61 | 2019 | Former Senior Partner of McKinsey & Company (Retired) | Yes |
| Thierry Pilenko | 62 | 2019 | Former Executive Chairman of TechnipFMC plc (Retired) | Yes |
| Paul E. Rowsey, III | 65 | 2000 | Former Chief Executive Officer of Compatriot Capital, Inc. (Retired) | Yes |
| Charles L. Szews | 63 | 2019 | Former Chief Executive Officer of Oshkosh Corporation (Retired) | Yes |
| Adam Weitzman | 35 | 2020 | Partner of Luminus Management LLC | Yes |
Board RefreshmentCommittee Composition
| Name | Audit Committee | Compensation Committee | Environmental, Social and Governance Committee | Nominating and Governance Committee | Strategy Committee | ||||||||||||
| Anton Dibowitz | Chair | ||||||||||||||||
| Dick Fagerstal | Chair | a | |||||||||||||||
| Joseph Goldschmid | Chair | a | a | ||||||||||||||
| Elizabeth D. Leykum | a | a | a | a | a | ||||||||||||
| Deepak Munganahalli | Chair | a | |||||||||||||||
| James W. Swent, III | a | a | Chair | ||||||||||||||
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2021 and EnhancedRecent Business Highlights
| • | Relisting on the New York Stock Exchange (“NYSE”). In May 2021, Valaris relisted on NYSE with the strongest balance sheet in the offshore drilling sector, providing the company with the best possible platform to thrive as we entered the early stages of an industry upcycle. As of 1 April 2022, Valaris’ share price had increased by 145% since relisting, significantly outperforming all of our major peers. | ||||
| • | Operational Excellence.We focus every day on delivering safe, reliable and efficient operations to our customers. In 2021, our revenue efficiency was over 98%, and we improved our personal safety performance by 25% as compared to our 2020 performance. These results are the product of our robust systems, processes and the dedication of our exceptional offshore crews to maintaining our high standards. In addition, we accomplished these results in the challenging working conditions faced by our offshore crews and support teams during the pandemic. | ||||
| • | Contracting Success. In 2021, we set out to build our contract backlog, first by securing additional work for our active rigs, and second by reactivating some of our high-quality stacked fleet for long term contracts. We achieved this goal, and as of our February 2022 fleet status report, have increased our contract backlog to more than $2.4 billion from just over $1.0 billion at the beginning of 2021. These backlog additions have added to our earnings visibility and importantly have been added at improving day rates, which will help to lay the foundation for increased earnings in the future. | ||||
| • | Sustainability. We continue to advance our sustainability efforts, and we made some notable progress on this journey over the past 12 months. Valaris now has a dedicated Environment, Social and Governance ("ESG") board committee and is building an internal sustainability function that will direct our path forward. Last year, we released our sixth annual Sustainability Report, which was aligned with Sustainability Accounting Standards Board ("SASB") standards, as well as an ESG Position Statement, outlining the values and commitments supporting our purpose of providing responsible solutions that deliver energy to the world. | ||||
| • | Financial Management. Valaris has the strongest balance sheet in the offshore drilling sector, and we are the only major offshore driller with a net cash position. We have only one tranche of debt, our $550 million senior secured notes due in 2028. This debt provides the flexibility to pay no cash interest until maturity. As of year-end 2021, we had a cash balance of more than $600 million, and we have no newbuild capital commitments. Our cash balance provides ample liquidity to fund operations and to make disciplined decisions about bringing new capacity to the market when justified by attractive opportunities. Valaris also has an industry-leading cost structure. We have significantly reduced our cost per active rig and implemented a shared services model, which allows our cost structure to be flexible, scalable and able to quickly adapt to changes in the market environment going forward. | ||||
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2021 and Recent Governance Highlights
| a | Independent Chair of the Board, separate from Chief Executive Officer | a | Director, executive officer and vice president share ownership guidelines (including at least six times (6x) base salary multiple for our Chief Executive Officer) | ||||||||
| a | No staggered board – all directors are elected annually | a | Minimum holding periods for all equity interests of the Company until share ownership guidelines are met | ||||||||
| a | Fully independent Audit, Compensation and Nominating and Governance ("N&G") committees | a | Directors and officers are not permitted to engage in transactions designed to hedge or offset the market value of our equity securities or to pledge our common shares | ||||||||
| a | Regular executive sessions of non-employee directors | a | Created dedicated ESG and Strategy Committees of the Board | ||||||||
| a | Majority vote standard for uncontested director elections | a | Reconstituted all Board committees, including replacing Chair of the Board, and Chairs of each of our standing committees | ||||||||
| a | Director nominees reflect gender and ethnic diversity (29% of Board nominees are diverse), in addition to diversity in experience and skills | a | Size of Board decreased by 22%, from nine to seven members in April 2021 and further reduced to six in September 2021 | ||||||||
| a | Annual Board and committee self-evaluations | a | Average director tenure of less than one year | ||||||||
| a | Our Code of Conduct applies to all officers, directors, employees and full-time contractors, with required annual compliance training. We expect our business partners and vendors to act consistent with our Code of Conduct | ||||||||||
| a | Published an ESG Position Statement | a | Aligned compensation with ESG performance by setting a spill prevention performance component of our short-term incentive plan | ||||||||
| a | Formed Board and employee-level committees to provide ESG oversight and advance our ESG initiatives | a | Continued investments in our workforce, including support for mental health and wellness and programs to develop leadership | ||||||||
| a | Implemented initiatives to increase energy efficiency and reduce emissions | a | Published our annual Sustainability Report in accordance with SASB standards | ||||||||
| a | Offshore production has among the lowest carbon emissions per barrel of oil produced compared to other types of oil and natural gas production | ||||||||||
Smaller Reporting Company
The Board appointed two new independent directors, Messrs. ArnoldCompany qualifies as a "smaller reporting company" under U.S. Securities and Lambert, with expertise in capital markets, financeExchange Commission ("SEC") rules and corporate governance in November 2019;
such. Under the Companies Act, we cannot issue new shares (other than in certain limited circumstances) without first obtaining approval from our shareholders. The Companies Act provides that this approval grants authority to the Board to allot shares inscaled disclosure obligations, the Company is not required to provide (and has not provided), among other items, Compensation Discussion and Analysis and certain other tabular and narrative disclosures relating to grant rights to subscribe for or convert any security of the Company into shares of the Company. Without the grant of authority from shareholders described in Resolution 10, the Board would be unable to issue any new shares without obtaining specific prior approval from our shareholders. Prior shareholder authorisation for the issue of new shares is required as a matter of U.K. law and it is customary for public limited companies incorporated under the laws of England and Wales to seek a general authority to issue new shares on an annual basis.executive compensation.
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QUESTIONS AND ANSWERS ABOUT
THE MEETING AND VOTING
1. Can I attend the meeting in person?
All persons travelling into Bermuda must apply for a travel authorization. Travel authorizations can be applied for up to 1 month before your scheduled departure to Bermuda, but must be submitted at least 1 day prior to your scheduled departure to Bermuda at a price of $40. All visitors must complete a pre-arrival test which can be either a PCR test (within 4 days of travel) or a supervised antigen test (within 2 days of travel) from which applicants must provide evidence of their negative result when applying for the travel authorization along with evidence of their vaccination. Upon entering Bermuda no further testing is required unless the visitor’s country of origin requires such testing for re-entry. As travel restrictions may change between the date of this proxy statement and your date of travel, please consult the Government of Bermuda website for any further announcement by - or shareholder communication from - the Company. In responsechanges to travel restrictions: https://www.gov.bm/coronavirus-travellers-visitors.
Due to the ongoing outbreak of COVID-19, the UK Government has prohibited public gatherings of more than two people. The Meeting this year will therefore be held as a closed meeting andapplicable travel restrictions, shareholders will not be able to attend in person. Shareholders are therefore strongly encouraged to submit a proxy vote in advance of the Meeting. Details on how to submit your proxy vote are set out on page 9. GivenIn light of the current restrictions on attendance,ongoing COVID-19 pandemic, shareholders are encouragedasked to appoint the chair of the Meeting as their proxy rather than a named person who will not be permitted to attend the Meeting. We have designated the following persons as proxiesproxy holders for the Meeting: Thomas P. Burke, Michael T. McGuintyAnton Dibowitz, President and Chief Executive Officer, and Davor Vukadin, Company Secretary.
Shareholders of Record: If you are a shareholder of record at the Chairclose of business on the Record Date and plan to attend the Meeting, please bring the Notice to the Meeting as your proof of ownership of Valaris shares.
Beneficial Owners: If you are a beneficial owner and plan to attend the Meeting, you will need to bring evidence of your ownership of Valaris shares as of the Meeting.Record Date in the form of a recently dated letter from your broker, bank or other nominee and a photo ID as proof of your identity. If you wish to vote at the Meeting, you must also bring a legal proxy as described in the answer to Question 17.
Please note that no cameras, recording equipment, laptops, tablets, cellular telephones, smartphones or other similar equipment, electronic devices, large bags, briefcases or packages will be permitted in the Meeting, and security measures will be in effect to ensure the safety of attendees. In all cases, you will need a photo ID to gain admission.
2. What is a proxy statement and what is a proxy?
A proxy statement is a document that the U.S. Securities and Exchange Commission ("SEC")SEC regulations require us to give you when we ask you to sign a proxy designating individuals to vote on your behalf. A proxy is your legal designation of another person to vote the shares you own. The person designated is called a proxy.proxy or proxy holder. If you designate someone as your proxy in a written document, that document is also called a proxy or a proxy card. Given the current restrictions on attendance, shareholdersShareholders are encouragedasked to appoint the chair of the Meeting as their proxy rather than a named person who will not be permitted to attend the Meeting. We have designated the following persons as proxiesproxy holders for the Meeting: Thomas P. Burke, Michael T. McGuintyAnton Dibowitz, President and Chief Executive Officer, and Davor Vukadin, Company Secretary.
If appointed by you, the Chairproxy holders will vote your shares as you direct on the matters described in this proxy statement, and in the absence of your direction, they will vote your shares as recommended by the Board.
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Unless you otherwise indicate on the proxy card, you also authorize your proxy holders to vote your shares on any matters not known by the Board at the time this proxy statement was printed and that under the Valaris bye-laws, may be properly presented for action at the Meeting.
3. Why did I receive these proxy materials?
We are providing this meeting notice, proxy statement, proxy card and 20192021 annual report and U.K. statutory accounts (the "proxy materials") in connection with the solicitation by our Board of proxies to be voted at ourthe Meeting. The proxies also may be voted at any continuations, adjournments or postponements of the Meeting. This proxy statement contains information you may use when deciding how to vote in connection with the Meeting. All shareholders as of the close of business on 23 March 202013 April 2022 (the "Record Date") are entitled to receive notice of, attend and vote at the Meeting or, subject to our Articles of Association,bye-laws, any adjournment or postponement of the Meeting. See instructions set forth in Question 17 below. A list of all shareholders of record entitled to vote at the Meeting will be on file at our principal executive offices, 110 Cannon Street, London, EC4N 6EU, United Kingdom, and will be available for inspection at the Meeting. Changes to entries on the register after this time will be disregarded in determining the rights of any person to attend or vote at the Meeting.
4. Why did I receive a Notice of Internet Availability of Proxy Materials instead of printed proxy materials?
Pursuant to rules adopted by the SEC, we have elected to provide access to our proxy materials over the Internet. Accordingly, we are sending a Notice of Internet Availability of Proxy Materials (the "Notice") by mail to our shareholders. All shareholders will have the ability to access the proxy materials on the website referred to in the Notice or to request a printed set of the proxy materials. Instructions on how to access the proxy materials over the Internet or to request a printed copy may be found in the Notice. We encourage you to take advantage of the availability of the proxy materials on the Internet in order to help reduce the costs and environmental impact of the Meeting.
5. Why did I not receive the Notice by mail or e-mail?
If you elected to receive proxy materials by mail or e-mail for any of your holdings in the past, you were automatically enrolled using the same process for all your holdings this year. If you would like to change the method of delivery, please follow the instructions set forth in the answer to Question 7.8.
6. How can I access the proxy materials over the Internet?
Pursuant to rules adopted by the SEC, we provide shareholders access to our proxy materials for the Meeting over the Internet. The proxy materials for the Meeting are available at www.proxyvote.com. To access these materials and to vote, follow the instructions shown on the proxy card or voting instruction card from your broker or the Notice.
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7. Can I get paper copies of the proxy materials?
You may request paper copies of the proxy materials, including our 20192021 annual report, and U.K. statutory accounts, by calling 1-800-579-1639 or e-mailing sendmaterial@proxyvote.com. You also may request paper copies when prompted at www.proxyvote.com.
8. Can I choose the method in which I receive future proxy materials?
There are three methods in which shareholders of record and beneficial owners may receive future proxy materials or notice thereof:
•Notice and Access: The Company furnishes proxy materials over the Internet and mails the Notice to most shareholders.
•E-mail: If you would like to have earlier access to future proxy materials and reduce our costs of printing and delivering the proxy materials, you can instruct us to send all future proxy materials to you via e-mail. If you request future proxy materials via e-mail, you will receive an e-mail next year with instructions containing a link to those materials and a link to the proxy voting website. Your election to receive proxy materials via e-mail will remain in effect until you change it. If you wish to receive all future materials electronically, please visit www.investordelivery.com to enroll or, if voting electronically at www.proxyvote.com, follow the instructions to enroll for electronic delivery after you vote.
•Mail: You may request distribution of paper copies of future proxy materials by mail by calling 1-800-579-1639 or e-mailing sendmaterial@proxyvote.com. If you are voting electronically at www.proxyvote.com, follow the instructions to enroll for paper copies by mail after you vote.
If you are a beneficial owner, you should consult the directions provided by your broker, bank, trust or other nominee with respect to how you receive your proxy materials and how to vote your shares.
If there are multiple shareholders residing at the same address, we will send one set of proxy materials per household. However, you may inform us as to whether you wish to receive one set of proxy materials per household or one set of proxy materials per person in the future by calling or emailing as set forth above.above
9. Can I vote my shares by completing and returning the Notice?
No, the Notice simply instructs you on how to vote. To vote your shares, see instructions set forth in Question 17 below.
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10. When and where is the Meeting and who may attend?
Meeting?
The Meeting will be held on 158 June 20202022 at 12:8:00 p.m. Londona.m. Bermuda time in the Rooftop Room at 110 Cannon Street, London, EC4N 6EU, United Kingdom. In response to the ongoing outbreak of COVID-19, the UK Government has prohibited public gatherings of more than two people. Subject to any further announcement by - or shareholder communication from - the Company, the Meeting this year will be held as a closed meeting and shareholders will not be able to attend in person.The Loren at Pink Beach, 116 South Shore Road, Tucker's Town, Smiths HS 01, Bermuda.
11. What is the difference between holding shares as a shareholder of record and as a beneficial owner?
Many of our shareholders hold their shares as "beneficial owners" through a broker, bank or other nominee rather than directly in their own name as "shareholders of record."As summarized below, there are some differences between shares held of record and those owned beneficially.
If your shares are registered in your name on the books and records of Computershare Trust Company, N.A., our transfer agent, you are a "shareholder of record." Accordingly, we sent the Notice directly to you. If you are a shareholder of record, you may vote your shares in person at the Meeting.
If your shares are held for you in the name of your broker, bank trust or other nominee, as custodian, your shares are held in "street name," and you are considered the "beneficial owner." Either the Notice or the proxy materials have been, or will be, forwarded to you by your broker, bank trust or other holder of record,nominee, who is considered the shareholder of record with respect to those shares. As the beneficial owner, you have the right to direct your broker, bank trust or other nominee on how to vote your shares by using the voting instruction card included in the mailing. As a beneficial owner is not the shareholder of record, you may not vote your shares at the Meeting unless you obtain a legal proxy from the broker, bank or other nominee that is the shareholder of record of your shares giving you the right to vote the shares at the Meeting.
12. What are my voting choices for each of the resolutions to be voted on at the Meeting?
You may vote "for" or "against" or you may elect to "abstain" with respect to each resolution. We have majority voting for the election of directors. If you “abstain” from voting in respect of a proposal, your vote will not be considered as a vote cast and will have no effect for such proposal. Under our Articles of Association,bye-laws, when a quorum is present, a nominee seeking election to a directorship shall be elected if a majority of the votes cast are cast in favourfavor of the resolution to elect or re-elect the director.
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13. What are our Board's recommendations on how I should vote my shares?shares
Our Board recommends that you vote your shares as follows:
| Resolution 1a. - | FOR the election of each of the | ||||
| Resolution 2 | FOR the | ||||
| Resolution 3 | |||||
FOR the non-binding, advisory vote to approve the compensation of our named executive officers. | |||||
All of the nominees named in Resolutions 1a.-1j.resolutions 1a.-1g. have indicated that they will be willing and able to serve as directors. If any nominee becomes unwilling or unable to serve as a director, the Board may propose another person in place of that nominee, and the individuals designated as your proxiesproxy holders will vote to elect that proposed person. Alternatively, the Board may decide, as appropriate, to reduce the number of directors constituting the full Board.
14. Are there any other matters to be acted upon at the Meeting?
We do not know of any other matters to be presented or acted upon at the Meeting. If any matters not set forth in the Meeting noticeNotice included in the proxy materials are properly brought before the Meeting, unless you otherwise indicate on your proxy card, the persons named in the accompanying proxy will have discretionary authority to vote on them in accordance with their best judgement.
15. Who is entitled to vote at the Meeting?
You are entitled to vote if you owned shares as of the close of business on the record date, 23 March 2020.Record Date, 13 April 2022. If you are a beneficial owner of Company shares, you must have a legal proxy from the shareholder of record to vote your shares at the Meeting. Each share is entitled to one vote, and there is no cumulative voting. Our outstanding warrants to purchase common shares are not entitled to vote at the Meeting.
As of 23 March 2020,the Record Date, we had 198,419,83875,000,058 shares issued and outstanding. Governing laws as well as our governance documents require our Board to establish a record date in order to determine who is entitled to receive notice of, attend and vote at the Meeting and any continuations, adjournments or postponements thereof. In accordance with the Company's Articles of Association,bye-laws, voting on all resolutions will be conducted on a poll and not onby a show of hands.
16. What is the quorum required to hold the Meeting? What are the effects of abstentions and broker non-votes at the Meeting?
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A broker non-vote occurs when a broker or itsother nominee holding shares for a beneficial owner does not vote on a particular proposal because the broker or nominee does not have discretionary voting power for that particular item and has not received instructions on how to vote from the beneficial owner. Under the NYSE rules that govern brokers who are votedvoting with respect to shares held in street name, brokers are allowed, but not required, to vote on any matter are included in“routine” matters (e.g., ratification of the selection of independent public accountants) but not on non-routine matters (e.g., election of directors and advisory votes on executive compensation). In determining the number of votes present or represented atcast for the Meetingresolutions in this proxy statement, broker non-votes do not count as votes cast, and are counted for quorum purposes.therefore will have no effect on vote outcomes.
An abstention occurs when a shareholder abstains from voting (either in person or by proxy) on one or more of the proposals. Broker non-votes occur on resolutions considered by the NYSE to be "non-routine" because a broker returns a proxy but does not have authority to vote on such resolutions on behalfIf you abstain from voting in respect of a beneficial owner who hasproposal, your vote will not submittedbe considered as a voting instruction form. The "non-routine" items in this proxy statement are Resolutions 1, 5, 6, 7, 8, 9 and 12; the other resolutions in this proxy statement are "routine" items for which a broker has authority under NYSE rules to vote shares, even if the broker does not receive a voting instruction form from the beneficial owner of the shares. In determining the number of votes cast for the Resolutions in this proxy statement, broker non-votes do not count as votes cast and thereforewill have no effect on vote outcomes. Abstentions count as votes cast only for Resolution 5, which requires shareholder approval under NYSE rules. For resolution 5, an abstention hassuch proposal.
We urge you to promptly provide voting instructions to your broker to ensure that your shares are voted on all of the practical effect of a vote againstproposals, even if you plan to attend the Resolution. For all other Resolutions, abstentions do not count as votes cast, and therefore do not affect the vote outcome.Meeting.
17. How do I vote?
Shareholders of Record: Subject to any further announcement by - or shareholder communication from - the Company, the Meeting this year will be held as a closed meeting and shareholders will not be able to attend in person. Given the current restrictions on attendance, youYou are encouragedasked to appoint the chair offollowing person as proxy holders for the Meeting as your proxy rather than a named person who will not be permitted to attend the meeting.Meeting: Anton Dibowitz, President and Chief Executive Officer, and Davor Vukadin, Company Secretary.
To be valid, any proxy card or other instrument appointing a proxy must be received (completed, dated and signed) before 3:00 p.m. Eastern Time on 127 June 20202022 (the "share voting cutoff time") by mail to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717 or by submission via the Internet by going to www.proxyvote.com and following the instructions provided.
Please sign the proxy card exactly as your name appears on the card. If shares are owned jointly, each joint owner should sign the proxy card. If a shareholder is a corporation, limited liability company or partnership, the proxy card should be signed in the full corporate, limited liability company or partnership name by a duly authorisedauthorized person. If the proxy card is signed pursuant to a power of attorney or by an executor, administrator, trustee or guardian, please state the signatory's full title and provide a certificate or other proof of appointment.
Beneficial Owners: If you are a beneficial owner, your broker, bank trust or other nominee will arrange to provide materials and instructions for voting your shares. The Meeting this year will be held as a closed meeting and shareholders will not be able to attend in person. Please note that you may not vote shares held in street name by returning a proxy card or voting instruction card directly to the Company unless you provide a legal proxy.
18. What can I do if I change my mind after I vote?
Shareholders of Record: If you are a shareholder of record, you may revoke your proxy or otherwise change your vote before it is exercised by doing one of the following:
•sending a written notice of revocation to our secretary, Michael T. McGuinty,Company Secretary, Davor Vukadin, at the registered office and headquarters of the Company,5847 San Felipe, Suite 3300, Houston, TX 77057, which must be received before the share voting cutoff time, 3:00 p.m. Eastern Time on 127 June 20202022, stating that you would like to revoke your proxy;
•by completing, signing and dating another proxy card and returning it by mail to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717 in time to be received before the share voting cutoff time, in which case your later-submitted proxy will be recorded and your earlier proxy revoked; or
•if you voted electronically, by returning to www.proxyvote.com and changing your vote before the share voting cutoff time. Follow the same voting process, and your original vote will be superseded.superseded; or
•participating in the Meeting and voting your shares, provided that you specifically request your previously granted proxy to be revoked.
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Beneficial Owners: If you are a beneficial owner, you can revoke your voting instructions or otherwise change your vote by following the instructions provided by your broker, bank or other nominee before the applicable deadline.
19. What if I do not specify a choice for a resolution in my proxy?
If you sign and return your proxy card appointing the persons designated by the Board as your proxies without indicating how you want your shares to be voted, your shares will be voted FOR each nominee in Resolutionresolution 1 and FOR Resolutionsresolutions 2 through 12and 3 or otherwise in accordance with our Board's recommendations by the persons designated as your proxies in Question 1.
20. Will my shares be voted if I do not provide my proxy or instruction form?
21. What does it mean if I receive more than one Notice?
If you received multiple Notices, it means that you hold your shares in different ways (trust,(e.g., trust, custodial accounts, joint tenancy) or in multiple accounts. Each Notice you receive should be voted.
22. Who will pay for the cost of this proxy solicitation?
We will bear the cost of this proxy solicitation. In addition to solicitation by mail, some of our directors, officers and employees may solicit proxies in person or by telephone for no additional compensation. We will also ask shareholders of record who are brokerage firms, banks, custodians, fiduciaries and fiduciariesother nominees to forward proxy materials to the beneficial owners of such shares and upon request we will reimburse such shareholders of record for the customary costs of forwarding the proxy materials. We have retained D.F. King & Co., Inc. ("D.F. King") to assist in the solicitation of proxies and anticipate that this will cost us approximately $15,000 plus certain out-of-pocket expenses.
23. Who will count the votes?
Broadridge Financial Solutions, Inc. will count the votes submitted by proxy and provide such report to our inspectors of election. The inspector(s) of election will be present at the Meeting.Company.
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24. When will Valaris announce the voting results?
We will report the final results on our website (www.valaris.com)(www.valaris.com) in a Current Report on Form 8-K filed with the SEC shortly after the Meeting.
If you have any further questions about voting or attending the Meeting, please contact our proxy solicitor, D.F. King. Shareholders may call toll-free at 1-800-461-9313,1-888-626-0988, and banks and brokers may call collect at 1-212-269-5550. D.F. King may be reached by email at valaris@dfking.com.
Shareholders who have general queries about the Meeting also can callemail Valaris at 1-713-789-1400 and ask for the Investor Relations department.at ir.hdqrs@valaris.com. No other methods of communication will be accepted. You may not use any electronic address provided either in this proxy statement or any related documents (including the proxy materials) to communicate with the Company for any purposes other than those expressly stated.
12
OWNERSHIP OF VOTING SECURITIES
The following tables show amounts and percentages of our Class A ordinarycommon shares (the only class of our securities issued and outstanding and eligible to vote) owned beneficially as of 2013 April 20202022 (except as noted below) by (i)(a) each person or group known by us to beneficially own more than 5% of our issued and outstanding shares; (ii)(b) each of our directors and each director nominee as of the date of this proxy statement; (iii)(c) each of our named executive officers identified in the 20192021 Summary Compensation Table (the "Named Executive Officers" or "NEOs"); and (iv)(d) all of our directors and executive officers as a group as of the date of this proxy statement.
Beneficial Ownership Table
Beneficial Ownership(1) | |||||||
| Name of Beneficial Owner | Amount | Percentage | |||||
| Luminus Management LLC | 36,982,076 | (2) | 18.64 | % | |||
| 1700 Broadway, 26th Floor | |||||||
| New York, NY 10019 | |||||||
| BlackRock, Inc. | 21,122,486 | (3) | 10.64 | % | |||
| 55 East 52nd Street | |||||||
| New York, New York 10055 | |||||||
| The Vanguard Group | 20,773,381 | (4) | 10.47 | % | |||
| 100 Vanguard Blvd. | |||||||
| Malvern, PA 19355 | |||||||
| Contrarius Investment Management Limited | 19,265,989 | (5) | 9.71 | % | |||
| 2 Bond Street | |||||||
| St. Helier Y9 JE2 3NP, Channel Islands | |||||||
| Odey Asset Management | 10,302,576 | (6) | 5.19 | % | |||
| 12 Upper Grosvenor Street | |||||||
| London, United Kingdom EC4N6EU | |||||||
| Dimensional Fund Advisors | 10,059,082 | (7) | 5.07 | % | |||
| 6300 Bee Cave Road | |||||||
| Building One | |||||||
| Austin TX, 78746 | |||||||
| Azvalor Asset Management | 9,950,906 | (8) | 5.01 | % | |||
| Paseo De La Castellana | |||||||
| 110. 28046, Spain | |||||||
| Named Executive Officers | |||||||
| Thomas P. Burke | 316,980 | — | % | (9) | |||
| President and Chief Executive Officer | |||||||
| Carl G. Trowell | 225,402 | — | % | (9) | |||
| Executive Chairman | |||||||
| Jonathan Baksht | 57,286 | — | % | (9) | |||
| Executive Vice President and Chief Financial Officer | |||||||
| Gilles Luca | 96,953 | — | % | (9) | |||
| Senior Vice President and Chief Operating Officer | |||||||
| Alan Quintero | 31,796 | — | % | (9) | |||
| Senior Vice President, Business Development | |||||||
| Michael T. McGuinty | 48,144 | — | % | (9) | |||
| Senior Vice President, General Counsel and Secretary | |||||||
| P. Carey Lowe | 88,755 | — | % | (9) | |||
| Former Executive Vice President and Chief Operating Officer | |||||||
| John S. Knowlton | 66,459 | — | % | (9) | |||
| Former Senior Vice President, Technical | |||||||
| Independent Directors | |||||||
| Keith O. Rattie | 15,859 | — | % | (9) | |||
| Director | |||||||
| Paul E. Rowsey, III | 30,594 | — | % | (9) | |||
Beneficial Ownership(1) | |||||||||||||||||
| Name of Beneficial Owner | Amount | Percentage | |||||||||||||||
| Oak Hill Advisors, L.P. | 9,412,822 | (2) | 12.55 | % | |||||||||||||
| One Vanderbilt, 16th Floor | |||||||||||||||||
| New York, NY 10017 | |||||||||||||||||
| GoldenTree Asset Management LP | 7,405,584 | (3) | 9.87 | % | |||||||||||||
| 300 Park Avenue, 21st Floor | |||||||||||||||||
| New York, NY 10022 | |||||||||||||||||
| Famatown Finance Ltd. | 5,116,198 | (4) | 6.82 | % | |||||||||||||
| Deana Beach Apartments, Block 1, 4th Fl. | |||||||||||||||||
| 33 Promachon Eleftherias Street | |||||||||||||||||
| Limassol G4 Cyprus 4103 | |||||||||||||||||
| Lodbrok Capital LLP | 4,619,698 | (5) | 6.16 | % | |||||||||||||
| 55 St. James's Street | |||||||||||||||||
| London, United Kingdom, SW1A 1LA | |||||||||||||||||
| Named Executive Officers | |||||||||||||||||
| Anton Dibowitz | 5,504 | (6) | — | % | (6) | ||||||||||||
| President and Chief Executive Officer | |||||||||||||||||
| Darin Gibbins | 185 | (6) | — | % | (6) | ||||||||||||
| Interim Chief Financial Officer and Vice President, Investor Relations and Treasurer | |||||||||||||||||
| Gilles Luca | 698 | (6) | — | % | (6) | ||||||||||||
| Senior Vice President and Chief Operating Officer | |||||||||||||||||
| Thomas P. Burke | — | (6) | — | % | (6) | ||||||||||||
| Former President and Chief Executive Officer | |||||||||||||||||
| Jonathan Baksht | 698 | (6) | — | % | (6) | ||||||||||||
| Former Executive Vice President and Chief Financial Officer | |||||||||||||||||
| Alan Quintero | 255 | (6) | — | % | (6) | ||||||||||||
| Former Senior Vice President, Business Development | |||||||||||||||||
| Directors | |||||||||||||||||
| Dick Fagerstal | 7,200 | (6) | — | % | (6) | ||||||||||||
| Director | |||||||||||||||||
| Joseph Goldschmid | 7,200 | (6) | — | % | (6) | ||||||||||||
| Director | |||||||||||||||||
| Elizabeth D. Leykum | 8,894 | (6) | — | % | (6) | ||||||||||||
| Chair of the Board | |||||||||||||||||
| Deepak Munganahalli | 7,200 | (6) | — | % | (6) | ||||||||||||
| Director | |||||||||||||||||
| James W. Swent, III | 7,200 | (6) | — | % | (6) | ||||||||||||
| Director | |||||||||||||||||
| All current directors and executive officers as a group (8 persons) | 44,081 | (6) | — | % | (6) | ||||||||||||
____________________
(1)As of 13 April 2022, there were 75,000,058 shares issued and outstanding. Unless otherwise indicated, each person or group has sole voting and dispositive power with respect to all shares. 13 (2)Based on the Form 13F filed on 31 December 2021, Oak Hill Advisors, L.P. ("Oak Hill") may be deemed the beneficial owner of 9,412,823 shares. Furthermore, based on the Schedule 13D filed on 25 June 2021, Oak Hill reports shared voting power over 8,979,806 shares and shared dispositive power over 8,979,806 shares. (3)Based on the Schedule 13G filed on 10 February 2022, GoldenTree Asset Management LP ("GoldenTree") may be deemed the beneficial owner of 7,405,584 shares.GoldenTree reports shared voting power over 7,405,584 shares and shared dispositive power over 7,405,584 shares. (4)The amount shown as beneficially owned by Famatown Finance Limited ("Famatown") is based on information Famatown provided to the Company on 19 April 2022. Famatown previously reported, in a Schedule 13D filed on 23 December 2021, that it was deemed the beneficial owner of 4,654,353 shares. Famatown also reported shared voting power over 4,654,353 shares and shared dispositive power over 4,654,353 shares. (5)Based on the Schedule 13G filed on 14 February 2022, Lodbrok Capital LLP ("Lodbrok") may be deemed the beneficial owner of 4,619,698 shares.Lodbrok reports sole voting power over 4,619,698 shares and sole dispositive power over 4,619,698 shares. (6)Ownership is less than 1% of our shares issued and outstanding based on 75,000,058 common shares issued and outstanding as of 13 April 2022 and includes for each person the number of shares that such person has the right to acquire within 60 days of such date. 14 |
RESOLUTIONS 1a. - 1j.1g.
1.TO ELECT EACH OF THE FOLLOWING DIRECTORS:
1a. WILLIAM E. ALBRECHTANTON DIBOWITZ
1b. FREDERICK ARNOLDGUNNAR ELIASSEN
1c. THOMAS P. BURKEDICK FAGERSTAL
1d. MARY E. FRANCIS CBEJOSEPH GOLDSCHMID
1e. GEORGES J. LAMBERTELIZABETH D. LEYKUM
1f. SUZANNE P. NIMOCKSDEEPAK MUNGANAHALLI
1g. THIERRY PILENKO
AS DIRECTORS OF THE COMPANY FOR A TERM TO EXPIRE ATSERVE UNTIL THE ANNUAL GENERAL MEETING OF SHAREHOLDERS TO BE HELD IN 2021.2023 OR UNTIL THEIR RESPECTIVE OFFICES ARE OTHERWISE VACATED IN ACCORDANCE WITH THE BYE-LAWS OF THE COMPANY.
In addition, pursuant to the Cooperation and Support AgreementDecember 2021, Valaris entered into between the Company and Luminus Management LLC (“Luminus”), our largest shareholder at that time, dated 24 January 2020a support agreement (the “Support Agreement”"Support Agreement"), Adam Weitzman, a representative of Luminus, was appointed to the Board. The Company also agreed that the Board will nominate Messrs. Weitzman, Arnold and Lambert for election as directors at the Meeting. with Famatown. Pursuant to the Support Agreement, the Company is nominating Gunnar Eliassen as a director of the Company. Mr. WeitzmanEliassen will tender his resignation as a director (which the Board may or may not accept) if LuminusFamatown sells our shares and after giving effect to such sale Luminus’Famatown's aggregate beneficial ownership falls below certain thresholds set forth in the agreement.Support Agreement. Furthermore, LuminusFamatown has agreed to vote “For” the Company’s Resolutionsresolutions set forth in this proxy statement at the Meeting.
The N&G Committee and the Board have determined that these nominees possess the appropriate mix of skills and characteristics required of Board members. The Board regularly evaluates the composition of the Board in the context of the perceived needs of the Board at a given point in time. In evaluating potential director nominees, our Board evaluates their qualifications as set forth in our Corporate Governance Policy, which is further described on page 22.
In addition, the Board believes that the Company’s directors should be diverse. The N&G Committee endeavors to include, and have any search firm that it engages include, women, minority and other diverse candidates in the pool of possible director candidates. In furtherance of our commitment to diversity, the N&G Committee is actively recruiting a female Board member, with the assistance of the full Board and a retained search firm.
The Board recommends that shareholders vote FOR each nominee standing for election as director.
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Nominees
The particular experience, qualifications, attributes and skills that led our Board to conclude that Mr. AlbrechtDibowitz should serve as a director include his experience in various executive positions with extensive managerial oversight, his over 40 years ofand industry experience, in the oil and gas industry and his broad experience in proactively engaging with regulatory agencies, communities and other stakeholders.including prior Chief Executive Officer experience.
Mr. ArnoldEliassen has been our director since November 2019. Mr. Arnold has 40 years of experience, including senior financial leadership positions at global organisations. Prior to his appointment to the Board, Mr. Arnold spent over 20 yearsserved as an investment banker advising clients on mattersdirector at Seatankers Services (UK) LLP, a holding company of corporate finance, includingassets across several business sectors, since January 2016. In addition, Mr. Eliassen has served as the Chief Executive Officer of ST Energy Transition I Ltd. (NYSE: STET), a special purpose acquisition company targeting energy transition and clean energy technology, since December 2021. Mr. Eliassen previously worked as a Partner at Pareto Securities between 2011 and 2015 and was responsible for executing public and private capital markets transactions capital structure optimisationwith an emphasis on the energy sector. Mr Eliassen currently serves on the board of directors of KLX Energy Services Holding (NASDAQ: KLXE), Golden Close Maritime and mergers and acquisitions across various markets and geographies. Mr. Arnold held a series of senior financial positions with private equity portfolio companies, most recentlyNorAm Drilling Company AS. Previous experience includes serving as Chief Financial Officer of Convergex Group, LLC, a provider of agency brokerage and investment technology, from July 2015 until May 2017, where he was responsible for capital allocation and financial operations. Previously, Mr. Arnold served as Executive Vice President, Chief Financial Officer and a member of the executive committee of Capmark Financial Group, Inc. from September 2009 to January 2011. He also served as Executive Vice President of Finance for Masonite Corporation from February 2006 to September 2007. While at Willis Group from 2000 to 2003, Mr. Arnold served as Chief Financial and Administrative Officer of Willis North America, as Group Chief Administrative Officer of Willis Group Holdings Ltd. and as Executive Vice President of Strategic Development for Willis Group Holdings Ltd. He also served as a member of the Willis Group executive committee while holding the latter two positions. Mr. Arnold currently serves on the Board of Directors of Navient CorporationSeadrill Ltd., Aquadrill LLC (formerly known as Seadrill Partners LLC), Quintana Energy Services Inc. and Lehman Brothers Holdings Inc.Northern Drilling Ltd. Mr. Arnold currently serves on our Audit Committee andEliassen received a Master’s degree in Finance Committee.from the Norwegian School of Economics.
The particular experience, qualifications, attributes and skills that led our Board to conclude that Mr. ArnoldEliassen should serve as a director include his extraordinary breadthextensive industry experience and depthexperience with public and private investments, including investments in the energy industry.
Dick Fagerstal; age 61; Executive Chairman of experiencethe Global Marine Group
Dick Fagerstal has served as Executive Chairman of the Global Marine Group, based in equityChelmsford, United Kingdom, a subsea cable installation and debt capital markets, operationsmaintenance business operating globally in the telecoms, offshore renewables, and governance from his 40-year career in international investment bankingoil and other finance roles, including servinggas sectors, since February 2020. From 2014 to 2020 Mr. Fagerstal served as Chief Financial Officer for multiple companies.
The particular experience, qualifications, attributes and skills that led our Board to conclude that Mr. BurkeFagerstal should serve as a director include his extensive managerialbusiness, finance and industry experienceaccounting background. In addition, his knowledge of the energy and his strong background in operationsmaritime industries contributes to our Board’s ability to monitor the risks facing our company.
16
Joseph Goldschmid; age 36; Managing Director at Oak Hill Advisors, L.P. ("OHA")
Joseph Goldschmid has served as a Managing Director with primary focus on stressed, distressed and special situations investments at OHA, an alternative investment firm with over $50 billion under management across performing and distressed credit related investments in the globalNorth America, Europe and other geographies since November 2019. At OHA, Mr. Goldschmid covers a variety of industries including energy sector.
The particular experience, qualifications, attributes and skills that led our Board to conclude that Mr. Goldschmid should serve as a director include his prior management and governance experience from overseeing various investments in a variety of industries, including the energy industry.
Elizabeth D. Leykum; age 43; Founder of Serenade Capital LLC
Elizabeth D. Leykum has previously served as a non-executive directorfounder of the Swiss Re Group. Ms. Francis was appointedSerenade Capital LLC, an investment firm, since May 2016. From October 2013 to the Boards of Directors of Barclays PLC and Barclays Bank PLC in October 2016. She served on the Board of Directors of Centrica plc, an integrated energy company, between 2004 and 2014, and was Senior Independent Director from 2006 to 2014. From 2005 to 2012,April 2016, she served as a non-executive directorfounding principal of Aviva plc,HEG Capital LLC, a Connecticut-registered investment advisory firm. Prior to joining HEG Capital, Ms. Leykum was, from June 2012 to September 2013, a Vice President at Rand Group, an investment management services firm. Until June 2012, she was a Vice President of ESL Investments, Inc., which she joined in July 2004. From 2000 to 2002, Ms. Leykum worked in the Principal Investment Area at Goldman, Sachs & Co. She has served on the board of Lands’ End, Inc. (NASDAQ: LE) since April 2014, where she was previously Chairman of the Board, and from 2009 to 2012, she has served as a non-executive director of Cable & Wireless Communications Plc.IES Holdings (NASDAQ: IESC) since April 2021. She is alsocurrently a former non-executive directortrustee of The Kinkaid School and the BankHouston Ballet as well as on the Advisory Board of England, Alliance & Leicester plcThe Artemis Fund. She graduated Phi Beta Kappa, magna cum laude from Harvard College and St. Modwen Properties PLC and is a Senior Adviser to the International Relations Institute, Chatham House. She earned a Master of Arts in Historyreceived an MBA with distinction from Newnham College, University of Cambridge. Ms. Francis currently serves on our Audit Committee and Nominating, Governance and Sustainability Committee.Harvard Business School.
The particular experience, qualifications, attributes and skills that led our Board to conclude that Ms. FrancisLeykum should serve as a director includeincludes her experience as a director for various British and international public companies, including Swiss Reinsurance Company Ltd, Barclays PLC and Barclays Bank PLC, her tenure as a non-executive director of the Bank of England, Alliance & Leicester plc and St. Modwen Properties PL, her role as a Senior Adviserwork in investment management, which brings to the International Relations Institute, Chatham House, her experience as the chairman of board committees for several public companies, her expertise in matters ofBoard an ability to analyze, assess and oversee corporate governanceand financial performance, and her experiencepublic company governance experience.
Deepak Munganahalli; age 52; Co-founder of JOULON
Deepak Munganahalli has served as co-founder of JOULON, an energy industry asset management services company, with a primary focus on the EfW (energy from waste) strategy, mergers, acquisitions and divestitures. Prior to serving as co-founder, Mr. Munganahalli served as Chairman of JOULON, an asset management company established in senior positions within the UK government.
The particular experience, qualifications, attributes and skills that led our Board to conclude that Mr. LambertMungnahalli should serve as a director include his management expertiseoperational and capital markets and equity analystbusiness experience including in the energy services sector, his significant corporate governance experience, his tenure as an investment representative for Capital International Group’s governance and stewardship engagements, his in-depth knowledge of the energyoffshore drilling industry, and the stock market, andwhich contributes to his ability to bring a shareholder perspective toassess the ESG risks facing the Company.
17
James W. Swent, III; age 71; Former President, Chief Executive Officer & Chairman of the Board given his extensive experience as a portfolio manager at The Capital Group.
James W. Swent III served as the Houston Office Manager for eight years. Ms. Nimocks currently serves onPresident, Chief Executive Officer & Chairman of the boardsBoard of ArcelorMittal, Ovintiv Inc. (formerly named Encana Corporation)Southcross Energy Partners, GP LLC, the general partner of Southcross Energy Partners, L.P., a provider of natural gas gathering, processing, treating, compression and Owens Corning, including service on the Appointments, remuneration & corporate governancetransportation services and sustainability committee of ArcelorMittal; the Human
The particular experience, qualifications, attributes and skills that led our Board to conclude that Mr. Pilenko should serve as a director include his significant international oil and energy policy expertise, his service on boards and committees of publicly traded companies, his extensive experience in the oil and gas energy industry, including CEO leadership positions, and his strong background in finance, operations, management and investments in the global energy sector.
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RESOLUTION 2
The Board proposes and recommends the approval of the appointment of KPMG LLP as our U.S.the Company’s independent registered public accounting firm until the close of the next annual general meeting of shareholders to audit our books, records, and accounts and those of our subsidiaries for the fiscal year endingended 31December 2020. 2022, and to authorize the Board, acting by the Audit Committee, to determine the remuneration of the independent registered public accountants.
KPMG LLP (U.S.) has served as our U.S. independent registered public accounting firm since the fiscal year ended 31 December 2002, having been duly appointed by the Board or by the Audit Committee each year in conformity with then-applicable rules. Our Audit Committee has also appointed KPMG LLP (U.K.), to serve as our statutory auditors under the Companies Act. KPMG LLP (U.K.) has served as our statutory auditors since our 2015 annual general meeting of shareholders. Prior to that time, KPMG Audit Plc, a subsidiary
Representatives of KPMG LLP (U.K.), served as our statutory auditors since our re-registration as a public limited company in December 2009. We are asking our shareholders to authorise the Audit Committee to determine KPMG LLP (U.K.)'s remuneration as statutory auditors in accordance with the Audit Committee's procedures and applicable law. Due to UK Government legislation related to the COVID-19 outbreak, we do not expect representatives of KPMG LLP (U.S.) and KPMG LLP (U.K.) towill be present at the Meeting, nor toMeeting. They will have thean opportunity to make a statement, if they desire to do so, orand will be available to respond to appropriate shareholder questions.
The Board recommends that shareholders vote FOR the ordinary resolution to ratifyapproval of the Audit Committee's appointment of KPMG LLP (U.S.) as our U.S. independent registered public accounting firm for the year ending 31December 2020; FOR the ordinary resolution to appoint KPMG LLP (U.K.) as our U.K. statutory auditors under the Companies Act (to hold office until the conclusionclose of the next Annual General Meeting of Shareholders at which accounts are laid before the Company);shareholders in 2023 and FORto authorize the ordinary resolution to authorise theBoard of Directors, acting through its Audit Committee, to determine our U.K. statutory auditors' remuneration.
Independent Auditor Pre-approval Policies and Procedures
Consistent with SEC rules and policies regarding auditor independence, the Audit Committee has responsibility for appointing and approving the compensation and overseeing the work of our U.S. independent registered public accounting firm. In recognition of this responsibility, the Audit Committee has established a policy to pre-approve all audit and permissible non-audit services provided by our U.S. independent registered public accounting firm.
Under the policy, we submit an itemiseditemized listing of all services to the Audit Committee for which pre-approval is requested. Such listing includes a description of each proposed service, the associated estimated fees and other terms of the engagement. To the extent any such service is a non-audit service, the submission includes an explanation as to why such service qualifies as a permitted non-audit service and why providing such service would not impair the independence of our U.S. independent registered public accounting firm or our U.K. statutory auditors.
firm.
Fees and Services
The aggregate fees (excluding value added taxes) billed to us for the fiscal years ended 31 December 20192021 and 20182020 by KPMG LLP (U.S.) and its affiliates (including KPMG LLP (U.K.)) were as follows (in thousands):
| 2019 | 2018 | 2021 | 2020 | |||||||||||||||
Audit Fees(1) | $ | 4,226 | $ | 2,618 | Audit Fees(1) | $ | 3,839 | $ | 3,270 | |||||||||
| Audit Related Fees | Audit Related Fees | — | — | |||||||||||||||
Tax Fees(2) | 1,094 | 946 | Tax Fees(2) | 380 | 787 | |||||||||||||
| All Other Fees | All Other Fees | — | — | |||||||||||||||
| $ | 5,320 | $ | 3,564 | $ | 4,219 | $ | 4,057 | |||||||||||
____________________
19 (1)Includes fees for the audit of our annual consolidated financial statements and audit of the effectiveness of our internal control over financial reporting included in our annual report on Form 10-K, reviews of condensed consolidated financial statements included in our quarterly reports on Form 10-Q, audits of certain subsidiary statutory accounts, attestation services and procedures conducted in connection with bankruptcy proceedings, debt or equity transactions and consents to incorporate KPMG LLP's reports into registration statements filed with the SEC. (2)Represents fees for tax compliance and other tax-related services. |
Our Audit Committee pre-approved the services provided during 20192021 and 20182020 described above, in accordance with our Audit Committee's policy and the pre-approval requirements of the Sarbanes-Oxley Act of 2002, as amended (the "Sarbanes-Oxley Act"). Accordingly, there were no services for which the de minimusminimis exception, as defined in Section 202 of the Sarbanes-Oxley Act, was applicable. Our Audit Committee has considered whether the provision of non-audit services by KPMG LLP (U.S.) were compatible with maintaining KPMG LLP (U.S.)'sLLP's independence and has determined that the provision of such non-audit services does not undermine KPMG LLP (U.S.)'sLLP's independence.
20
RESOLUTION 3
3. TO APPROVE, ON AN ADVISORY NON-BINDING BASIS, THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS.
We are providing our last annual general meeting of shareholders Valaris has proactively engaged with shareholders, refreshed the Board and enhanced governance. Our recent Board refreshment and governance enhancement efforts include:
Our executive compensation program for 2021 was developed and overseen by the Company’s independent Compensation Committee. We encourage our Board in November 2019;shareholders to closely review the “Executive Compensation” section below. The program was geared towards driving long-term, sustainable business performance. It was governed by the following key tenets:
•The compensation program was designed to be competitive within the drilling and oilfield services industries and equitable among various positions within the Company;
•The principal objectives of the compensation program are to attract, retain, motivate and reward the executives, managers and professionals that are essential to the Company’s short-term and long-term operational and financial success; and
•The compensation program was structured to promote the alignment of interests between management and our shareholders by ensuring that most of the compensation for the executive officers was variable and earned on the basis of short-term and long-term performance achievement of operational, financial and ESG goals (including personal and process safety) among others.
At the 2017 Annual General Meeting of Shareholders, our shareholders recommended, by advisory vote, a one-year frequency of future advisory votes on executive compensation. In accordance with these results, we intend to hold this vote annually until the next required advisory vote on the frequency of shareholder votes on the compensation of named executive officers, which we expect to hold no later than our 2023 Annual General Meeting of Shareholders.
The Board appointed two new independent directors, Messrs. Arnoldrecommends that shareholders vote FOR the approval of the compensation of our Named Executive Officers.
With respect to the non-binding advisory vote on resolution 3, the result of the vote will not require our Board or any committee thereof to take any action.However, our Board values the opinions of our shareholders and Lambert, with expertise in capital markets, finance and corporate governance in November 2019;will carefully consider the outcome of the advisory vote on resolution 3.
Smaller Reporting Company
The Board formedCompany qualifies as a "smaller reporting company" under SEC rules and has elected to prepare this proxy statement as such. Under the Finance Committeescaled disclosure obligations, the Company is not required to assist in its oversight of the Company’s capital structureprovide (and has not provided), among other items, Compensation Discussion and financial strategies;Analysis and certain other tabular and narrative disclosures relating to executive compensation.
21
Corporate Governance Guidelines
We have adopted a Corporate Governance Policy, which includes governance guidelines that assist the Board and its committees in the exercise of their responsibilities under applicable law and the listing standards of the NYSE. These governance guidelines provide a framework for the Company's governance and the Board's activities, covering such matters as Board membership criteria, director independence, Board meetings, Board structure, Board access to management and independent advisors, limitations on outside directorships, conflicts of interest, director compensation, shareholder communications to the Board, director attendance at shareholder meetings, evaluation of Board and Chief Executive Officer performance, management succession planning, risk oversight, share ownership guidelines and other corporate governance practices and principles. Our Corporate Governance Policy is available in the Governance Documents section under About on our website (www.valaris.com)(www.valaris.com). Paper copies also are available upon request without charge. Such requests should be directed to our Investor Relations Department at 5847 San Felipe, Suite 3300, Houston, Texas 77057.
Governance Practices
Our ethics, governance and compliance practices address all NYSE content requirements includingas reflected in our Code of Conduct and our Corporate Governance Policy. To assist in its review as to whether the board and its committees are functioning effectively, our board has instituted annual self-assessments of the Board and each of its committees. The directors participate in an annual evaluation of the Board and each committee on which they serve. The Board and each committee discuss the findings, making changes as deemed necessary to improve director communications and the overall effectiveness of board and committee meetings. The N&G committee oversees this evaluation process. The most recent self-assessment, which was conducted earlier this year, was guided by an independent consultant and helped identify the Board's need for additional gender diversity among its committeesmembers.
We appointed our current Chief Executive Officer in December 2021, and given Mr. Dibowitz's recent appointment, we did not conduct a formal annual reviewsevaluation of our Chief Executive Officer's performance in 2021. We intend to conduct an evaluation of our Chief Executive Officer's performance in 2022, consistent with the committee charters, as reflected in our Coderequirements of Business Conduct ("Code of Business Conduct") and our Corporate Governance Policy.
Our governance practices also provide that the independent directors conduct regular executive sessions without management, chaired by our Independent Lead Director, William E. Albrecht, and a formal annual evaluation of our Chief Executive Officer's performance. The Board fulfilled these requirements during 2019.
Governance Transparency
Our Board, its standing committees and management are committed to continually pursuing best practices of corporate governance, accountability and transparency. Our Audit Committee Charter, the NGS Committee Charter, the Compensation Committee Charter,committee charters, the Corporate Governance Policy and the Code of Business Conduct are available in the Governance Documents section under About on our website (www.valaris.com). Additional data available under the About tab on our website also includes information on our Board members and the Board’s committee composition. Additionally, our website under the "Investors-Financials" tab has a link to our public filings with the SEC, including equity ownership reports by our directors and executive officers required under Section 16 of the Exchange Act.
Director Nominations
The N&G Committee, with input from other Board members, is primarily responsible for identifying and screening candidates for nomination to Board membership. Additionally, when appropriate, we may retain the services of a third party to identify, evaluate or assist the N&G Committee and the Board in evaluating potential director nominees. Our Board is responsible for nominating individuals to serve on our Board.
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Pursuant to our Corporate Governance Policy, candidates nominated for election or re-election to our Board should possess the following qualifications:
•personal characteristics:
•highest personal and professional ethics, integrity and values,
•an inquiring and independent mind, and
•practical wisdom and mature judgement;
•experience at the policy-making level in business, government or education;
•expertise that is useful to our Company and complementary to the background and experience of other Board members (e.g., previous executive and board experience, an international perspective, capital intensive cyclical business experience and knowledge of the global oil and gas industry are considered to be desirable);
•willingness to devote the required amount of time to perform the duties and responsibilities of Board membership;
•commitment to serve on the Board over a period of several years to develop knowledge about our principal operations;
•willingness to represent the best interests of all shareholders and objectively appraise management performance; and
•no involvement in activities or interests that create a conflict with the director's responsibilities to us and our shareholders.
The N&G Committee will evaluate the qualifications of each director candidate, including any nominees recommended by shareholders, against these criteria in making recommendations to our Board concerning director nominations. The N&G Committee is responsible for assessing the appropriate mix of skills and characteristics required of Board members in the context of the perceived needs of our Board at a given point in time and periodically reviews and updates the criteria listed above as deemed necessary. Diversity in background, including ethnicity, gender, age and nationality, for the Board as a whole may be taken favorably into account in considering individual candidates, and it is one of the many factors that the N&G Committee may consider when identifying individuals for Board membership. The Board assesses its effectiveness in this regard as part of the annual Board evaluation process.
Our Board currently consists of seven members, including one woman and one South Asian director. The N&G Committee may identify potential director candidates from a number of sources, including recommendations from directors, management, shareholders and executive recruiting firms retained for such purpose. The N&G Committee uses the same criteria for evaluating candidates regardless of the source of referral.
The N&G Committee will consider director candidates recommended by shareholders. Shareholders wishing to propose a candidate for consideration by the N&G Committee may do so by writing our Company Secretary at our principal executive offices and following the requirements of our bye-laws for director nominations referred to in the "Information Concerning Shareholder Proposals for the 2023 Annual General Meeting of Shareholders" section of this proxy statement.
Our Board believes that the Company’s directors should be diverse. Our N&G Committee endeavors to include, and have any search firm that it engages include, women, minority and other diverse candidates in the pool of possible director candidates. In furtherance of our commitment to diversity, our N&G Committee is actively recruiting a female Board member, with the assistance of the full Board and a retained search firm.
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Board Skills Matrix
In accordance with its charter, the N&G Committee develops and recommends to the Board skills, experience, characteristics and other criteria for identifying and evaluating directors, which will inform the N&G Committee's annual evaluation of the composition of the Board to assess whether the mix of skills, experience, characteristics and other criteria are currently represented on the Board and those that may be needed in the future.
The following chart shows how these skills, experience, characteristics and other criteria are represented among our six current directors and Board nominee Gunnar Eliassen.
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Director Independence
Our bye-laws and Corporate Governance Policy state that at least a majority of the Board shall be independent, as the term is defined by SEC rules and NYSE Corporate Governance Standards. Except with respect to their directorships and as set forth below, we do not have any business or other relationships with our independent directors. Only independent directors serve on the Board's standing committees. In this regard, our Board has affirmatively determined that all director nominees and directors (being Mr. Eliassen, Mr. Fagerstal, Mr. Goldschmid, Ms. Leykum and Mr. Swent) are independent and have no material relationship with us, with the exception of Messrs. Dibowitz and Munganahalli. Accordingly, a substantial majority of our Board currently is independent as defined above.
In reaching its independence determinations, the N&G Committee and the Board considered the following: Mr. Munganahalli is a director of the Company and is also the co-founder and a current employee of JOULON. The Company regularly does business with several subsidiaries and affiliates of JOULON, which provide goods and services to the Company, including asset management services, structural engineering services, rig repair services, engineering services and high pressure equipment, inspection services, riser related services (including storage, inspection, preservation and repair) and rig stacking and maintenance arrangements. As of 13 April 2022, we have paid fees of $25.1 million since 1 January 2020 related to these goods and services.
Our Corporate Governance Policy provides that a director who changes his or her principal occupation shall promptly notify the Board of the change and submit a pro-forma letter of resignation to the Board. Under this policy, the other directors shall then meet in private session, determine whether the change of occupation impacts the director's independence or creates a conflict of interest and decide whether to accept or reject the pro-forma resignation.
Board Structure
The Board believes a separation of the Chair of the Board and Chief Executive Officer best serves the objectives of the Board's oversight of management, the Board's ability to carry out its roles and responsibilities on behalf of the shareholders, and the Company's overall corporate governance. The Board believes the separation of the Chair of the Board and Chief Executive Officer roles also allows Mr. Dibowitz to focus on operating and managing the Company and leverages the Chair of the Board's experience and perspectives. In addition, the Board believes that its leadership structure as described above provides an effective framework for addressing the risks facing our Company, as discussed in greater detail under "Risk Management Oversight." The Board has authority to modify this structure to best address the Company's circumstances and advance the best interests of shareholders as and when appropriate.
Our governance practices provide for strong independent leadership, independent discussion among directors, independent evaluation of, and communication with, members of senior management and independent oversight of the Company's operational, fiscal and risk management activities. These governance practices are reflected in our Corporate Governance Policy and the standing committee charters, all of which are available on our website.
Relevant provisions of the Corporate Governance Policy include:
•Independent directors meet at regularly scheduled executive sessions without the presence of the Chief Executive Officer and other Company personnel at each regular Board meeting and may convene such sessions during any Board meeting or by notice of a special Board meeting, which any two directors may cause to be called.
•Independent directors have open access to Valaris' management and independent advisors, such as attorneys or auditors.
•Independent directors are encouraged to suggest items for inclusion in the agenda for Board meetings and are free to raise subjects that are not on the meeting agenda.
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•The Presiding Chair leads executive sessions of the independent directors and serves as the interface between the independent directors and the Chief Executive Officer in communicating the matters discussed during executive sessions. The Board believes that this structure facilitates full and frank discussions among all independent directors. The Presiding Chair also:
◦develops an appropriate schedule of Board meetings and reviews in advance the agenda for Board meetings and Board committee meeting schedules as prepared by the Chief Executive Officerand the Secretary;
◦develops standards as to the quality, quantity and timeliness of the information submitted to the Board by the Company's management;
◦develops the agendas for and serves as chair of the executive sessions of the Board's independent directors;
◦serves as principal liaison between and among the independent directors and the Chief Executive Officer in respect of, and meets with the Chief Executive Officer one-on-one to discuss, issues discussed at executive sessions of the independent directors and feedback to the Chief Executive Officer; and
◦participates in recommendations regarding recruitment of new directors, management succession planning and annual Board performance and Chief Executive Officer evaluations.
Board Meetings and Committees
The Board met 20 times during the year ended 31 December 2021. The Board has five standing committees, the Audit Committee, the N&G Committee, the Compensation Committee, the ESG Committee and the Strategy Committee. During 2021 each incumbent director attended at least 75% of the aggregate meetings held by the Board and the committees of which he or she was a member.
The independent directors conducted executive sessions without management during each of the four regular quarterly meetings of the Board. Only independent directors serve on the Board's Audit, Compensation and N&G Committees.
Audit Committee
We have established and maintain an Audit Committee, which operates under a charter, in accordance with the rules promulgated under the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act"). The principal functions of our Audit Committee, as set forth in its charter, are to:
•appoint independent auditors to examine, review and audit our consolidated financial statements;
•review the general scope of services to be rendered by the independent auditors;
•pre-approve all services of the independent auditors and authorize payment of their associated fees;
•review with management the adequacy and effectiveness of our internal controls over financial reporting;
•review with management our earnings releases, quarterly financial statements and annual audited financial statements along with certain other disclosures;
•review, approve and oversee related party transactions and monitor compliance with our Code of Conduct; and
•provide oversight of risks associated with the Company's financial performance, information technology ("IT") and cybersecurity, internal and external audit functions, legal and tax contingencies and other exposures.
Our Audit Committee met seven times during 2021. The Audit Committee currently consists of Chair Fagerstal, Ms. Leykum and Mr. Swent, all of whom meet the independence criteria for audit committee members prescribed by the SEC and NYSE. None of the members of our Audit Committee serve on more than three public company audit committees.
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Our Board has determined that Messrs. Fagerstal and Swent meet the requisite SEC criteria to qualify as an audit committee financial expert, are financially literate and have accounting or related financial management expertise as defined in the NYSE Corporate Governance Standards. In making recommendations and determinations regarding audit committee financial experts, our Board and the Audit Committee considered the relevant academic and professional experience of the Audit Committee members.
Compensation Committee
The principal functions of our Compensation Committee, as set forth in its charter, are to:
•review and approve executive compensation, including matters regarding our various benefit plans, independently or in conjunction with our Board, as appropriate;
•review with management and approve any significant changes to the Company's compensation structure and various benefit plans;
•oversee administration of the Company's incentive-compensation and equity-based compensation plans, including the corporate goals and objectives applied to the compensation of the Company's executives;
•oversee compliance with SEC rules and regulations governing executive compensation; and
•evaluate appropriate compensation levels for non-employee directors.
During 2021, the Compensation Committee met 11 times. The Compensation Committee currently consists of Chair Goldschmid, Ms. Leykum and Mr. Swent, all of whom meet the independence criteria prescribed by the SEC and NYSE for service on a compensation committee.
Environmental, Social and Governance (ESG) Committee
The principal functions of our ESG Committee, as set forth in its charter, are to:
•review with management the Company’s definition of ESG and existing policies, programs and practices regarding ESG matters, the scope of potential ESG risks, liabilities and opportunities facing the Company, and the adequacy of the Company’s policies and programs to manage these risks, liabilities and opportunities;
•review with management the Company's specific governance around climate and emissions related risks and opportunities, including strategy, risk management, metrics and targets; and
•review with management the Company's ESG disclosures, including the Company's annual Sustainability ReportReport.
During 2021, the ESG Committee met three times. The ESG Committee currently consists of Chair Munganahalli, Mr. Fagerstal and instructionsMs. Leykum.
Nominating and Governance Committee
The principal functions of our N&G Committee, as set forth in its charter, are to:
•select, identify and screen candidates for nomination to our Board;
•recommend the composition of committees of our Board;
•recommend our slate of officers;
•oversee and recommend matters of corporate governance, independently or in conjunction with our Board, as appropriate; and
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•involvement in succession planning both from a general standpoint and with respect to a potential emergency situation that might impact the ability of the Board and executive management to continue the performance of their respective functions and responsibilities.
During 2021, the N&G Committee met five times. The N&G Committee currently consists of Chair Swent, Mr. Goldschmid and Ms. Leykum, all of whom meet the independence criteria prescribed by the NYSE for service on a nominating committee.
Strategy Committee
The principal functions of our Strategy Committee are to assist the Board in overseeing the Company’s strategic mergers and acquisitions (M&A) opportunities. During 2021, the Strategy Committee met two times. The Strategy Committee currently consists of Chair Dibowitz, Messrs. Goldschmid and Munganahalli and Ms. Leykum.
Director Attendance at the Meetings of Shareholders
Our Corporate Governance Policy provides that, barring extenuating circumstances, all members of the Board shall attend our annual general meetings of shareholders and also are encouraged to attend any and all other general meetings that may be duly convened. All incumbent directors serving on the Board at the time of the 2020 Annual General Meeting of Shareholders attended the meeting. Under Bermuda law, the Company was not required and did not hold an Annual General Meeting of Shareholders in 2021 as it was the Company's incorporating year.
Code of Conduct
Our Code of Conduct applies to all of our officers, directors and employees, including our principal executive officer, principal financial officer, principal accounting officer and controller. We also expect our business partners, including joint venture partners, vendors and other third parties, to act consistently with our Code of Conduct. Our Code of Conduct addresses all NYSE content requirements and includes provisions addressing conflicts of interest, corporate opportunities, confidentiality, fair dealing, protection and proper use of our assets and compliance with our policies and with laws, rules and regulations, including laws addressing insider trading, anti-competitive conduct and anti-bribery, including the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act 2010. No waivers of the provisions of our Code of Conduct have been requested or granted since the Code of Conduct was first issued on 1 November 2002.
Our Code of Conduct provides for confidential and anonymous submission of reports of non-compliance with our Code of Conduct, including reports of accounting, auditing or other business irregularities, by any employee or other person to the Company or directly to our Board or relevant Board Committee.
Shareholder Communications
Shareholders, employees and other interested parties may report concerns regarding questionable accounting, auditing or other matters on a confidential basis directly to the relevant presiding Valaris Committee Chairs. This process, which is available on the Ethics & Compliance section under Corporate Responsibility on our website (www.valaris.com), provides a means for submission of such interested parties' communications. Such communications may be submitted by mail, addressed as follows: Valaris Board, 1415 South Voss Rd., Suite 110, P.O. Box 135, Houston, Texas 77057. Mail so addressed will be forwarded, unopened, directly to the Chair of the Board unless specifically addressed to a Committee Chair or individual director and will not be screened by management.
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Hotline Reports and Investigations
We have a telephonic and web-based Hotline system to encourage reporting of possible wrongdoing, violations of our Code of Conduct, or other issues that threaten our reputation (the "Hotline"). The Hotline is managed by an independent third party to protect employee privacy and includes the ability to report concerns anonymously, where permitted by law. Any Hotline allegations are investigated and addressed by a Company management committee working under the direction of, and reporting regularly to, the Audit Committee.
Risk Management Oversight
The Board and its committees are actively involved in the oversight of risks that could impact our Company. The Board oversees the management of enterprise-wide risks, such as those related to macroeconomic and market conditions, commodity prices, strategic decisions, significant operating risks and disruptions.
The Board regularly reviews the Company's financial condition and results of operations and discusses various strategies as it deems appropriate considering market conditions facing the Company. The Board annually approves a budget, with subsequent approval required for any significant variations. On a quarterly basis, the General Counsel reports to the Board on legal matters that may have a significant impact on the Company's financial statements. The Board also receives periodic reports regarding the Company's insurance program and is apprised of all material variations in coverage or premium cost in connection with each annual insurance renewal.
In addition, the Board oversees the Company's management of risk in the areas of health, safety and environment. For example, the Board reviews statistics regarding safety incidents, including an in-depth review of the most serious incidents and related mitigation; reviews the regional risk to employees, assets and the Company's operations; and reviews any material compliance issues or any material pending or threatened proceedings regarding health, safety or environmental matters.
The Board also oversees risks through the Company's enterprise risk management program, which is designed to identify significant risks facing us, including operational safety, operational performance, regulatory, environmental and cybersecurity risks. Our Internal Audit Department is responsible for implementing the program, which involves the identification of risks facing the Company, the assessment of existing and required mitigation plans for those risks and the ongoing monitoring of both. On a quarterly basis, our Internal Audit Department assesses risk trends, identifies new potential risks and reviews mitigation plans with a cross-functional Enterprise Risk Committee. The Enterprise Risk Committee reports its results to the Board quarterly. The Board reviews the identified risks, mitigation plans and monitoring reports and takes action as deemed appropriate.
The Board has delegated to its Committees the responsibility to monitor specific risks and receives regular updates from its Committees on those risks.
The Audit Committee plays a significant role in the oversight of risks associated with the Company's financial performance, IT and cybersecurity, internal and external audit functions, legal and tax contingencies and other exposures. The Company's independent auditors, the head of IT, the Director of Internal Audit and the Chief Compliance Officer report to the Audit Committee at each quarterly meeting. The Audit Committee reviews and approves the annual internal audit plan and budget and also receives reports on all internal audits. Hotline reports canand related investigations conducted pursuant to our Code of Conduct are reviewed quarterly in executive session of the Audit Committee with the Chief Compliance Officer. The Vice President of Tax submits a quarterly report to the Audit Committee on tax matters that may have a significant impact on the Company's financial statements. In addition, with the Audit Committee’s oversight, the Company engages third party experts to assess aspects of the Company’s cybersecurity program. The Company’s employees also undertake an annual cybersecurity training program, which is augmented by additional training and communications on information technology and cybersecurity matters throughout the year. The Audit Committee is actively engaged in the oversight of our information technology and cybersecurity program. The Audit Committee, at least quarterly, receives reports from the head of IT on, among other things, the Company’s cybersecurity risks and measures, training and organizational readiness.
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The Compensation Committee, in consultation with its compensation consultants, establishes performance goals for the Company's various compensation plans that are intended to drive behavior that does not encourage or result in any material risk of adverse consequences to the Company and its shareholders.
The N&G Committee and the Board also are actively involved in succession planning both from a general standpoint and with respect to a potential emergency situation that might impact the ability of the Board and executive management to continue the performance of their respective functions and responsibilities.
In 2021, the Board formed the ESG Committee which is responsible for providing oversight and guidance with regard to environmental, social and governance matters and for reviewing the Company's Sustainability Report. The ESG Committee oversees the scope of potential ESG risks, liabilities and opportunities facing the Company and the adequacy of the Company’s policies and programs to manage these risks, liabilities and opportunities. The Committee also reviews with management the Company’s specific governance around climate and emissions related risks and opportunities, including strategy, risk management, metrics and targets.
Sustainability
At Valaris, our purpose is to provide responsible solutions that deliver energy to the world. Our values of integrity, safety, excellence, respect, ingenuity and stewardship guide us as we fulfill our purpose. We continue on our journey to take care of the environments in which we operate and to serve the communities and geographies in which we work.
In support of these efforts, we have:
•Published an ESG Position Statement, which reflects our commitment to developing targets focused on reducing emissions; implementing technology solutions that positively contribute to the Paris Agreement goal to limit global warming to 1.5 degrees Celsius; and focusing on the diversity of the Company’s workforce. The Valaris Executive Management Team and the Board’s ESG Committee reviewed and endorsed the statement and will review progress against these targets annually once they are developed.
•Published our Annual Sustainability Report, which highlights the sustainability efforts that demonstrate our commitment to our purpose, values and communities. This report was prepared in accordance with the Sustainability Accounting Standards Board standards applicable to our industry and includes reporting of our Scope 1, 2 and 3 greenhouse gas emissions, among other data. We have published an annual sustainability report since 2016.
•Formed the Board’s ESG Committee, which is responsible for providing oversight and guidance with regard to environmental, social and governance matters, including oversight of climate and emissions related risks and for reviewing the Company’s annual Sustainability Report.
•Established the Green Sustainability Team, an internal cross-functional working group that includes employees from various levels of the organization, to coordinate our ESG efforts and to gain knowledge from our peers by learning from their progress. In addition, we are building an internal Sustainability function that will direct our sustainability efforts going forward.
•Implemented initiatives to increase energy efficiency and reduce emissions, including
◦drillship VALARIS DS-12 became the first vessel in the world to receive the ABS Enhanced Electrical System Notation EHS-E, which recognizes the vessel’s ability to optimize its power plant performance, enabling operations on fewer generators and thereby reducing emissions;
◦jackup VALARIS 123 was upgraded with a selective catalytic reduction (“SCR”) system prior to working on a carbon dixoide ("CO2") transport and storage project. Valaris currently has an SCR system fitted on four drillships and one jackup. When in operation, the SCR system is designed to eliminate almost all nitrogen oxide ("NOX") emissions from the rig;
◦optimizing supply chain and logistics processes, including the reduction of carbon-intensive air freight, to improve efficiency and reduce Scope 3 greenhouse gas emissions; and
◦customer recognition of our sustainability efforts, including the distinction of being the best performer for drilling rigs in Eni’s 2021 HSE and Sustainability Awards.
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•Endeavored to support and build diversity and inclusion throughout our workforce, as our operations span the globe, we seek to bring local employment for the benefit of the communities in which we work. Over 55 nationalities are represented in our workforce as of March 2022.
•Aligned compensation with ESG performance by setting a spill prevention performance component of our 2022 Valaris Cash Incentive Plan. Spill prevention performance is a measure that considers the environmental impact of any substances released in the course of our operations. The spill prevention performance metric applies a weighted score for each spill based on both the type of material released and the volume released. This approach recognizes that a larger spill volume of one type of material (such as brine) may not have the same impact of a smaller volume of a more hazardous material (such as hydrocarbons).
•Continued investments in our workforce during the pandemic, including deploying an offshore safety leadership program and developing an internal onshore leadership program focused on improving workforce engagement.
•Supported employee wellness by responding to the COVID-19 pandemic’s pressures on our workforce and implementing several initiatives to increase awareness of and provide support for their mental health and wellness.
Our ESG Position Statement and Sustainability Reports are not incorporated into this proxy statement but may be found on the "Corporate Responsibility"“Safety & Environment – Sustainability” section of our website
Related Party Transactions
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AUDIT COMMITTEE REPORT
The Audit Committee of the Board of Directors of Valaris plc (the "Company")the Company is composed of fourthree independent directors who satisfy the requirements of independence as established by Section 10A of the Securities Exchange Act of 1934, as amended, and the New York Stock ExchangeNYSE listing standards. The Audit Committee is governed by a written Chartercharter adopted by the Board of Directors. Our Audit Committee Charter charter is available in the Governance section under the About tab on our website (www.valaris.com). To fulfill its responsibilities, the Audit Committee of the Company met nineseven times during the 20192021 fiscal year.
Management is responsible for the Company's internal controls, financial reporting process and compliance with laws and regulations and ethical business standards. The independent registered public accounting firm is responsible for performing an independent audit of the Company's consolidated financial statements and internal control over financial reporting in accordance with standards of the Public Company Accounting Oversight Board (United States) and for issuing a report thereon. The Audit Committee is directly responsible for recommending the appointment and approval of the compensation and oversight of the independent registered public accounting firm employed by the Company (including resolution of disagreements between management and the independent registered public accounting firm regarding financial reporting) for the purpose of preparing or issuing an audit report or related work. The independent registered public accounting firm reports directly to the Audit Committee.
The Audit Committee has established practices to evaluateevaluates the qualifications, compensation, performance and independence of the Company’s independent registered public accounting firm. In determining whether to reappointrecommend the independent registered public accounting firm employed by the Company for reappointment, the Audit Committee considered the qualifications, performance and independence of the firm and the audit engagement team; the quality of services provided by the firm; the effectiveness of the communication and interaction between the independent registered public accounting firm, management and the Audit Committee; and the fees charged for the quality and breadth of services provided.
The Audit Committee has met and held discussions with management and the independent registered public accounting firm. Management represented to the Audit Committee that the Company's consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America, and the Audit Committee has reviewed and discussed the audited consolidated financial statements with management and the independent registered public accounting firm. The Audit Committee has discussed with the independent registered public accounting firm the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board.Board and the SEC.
The Audit Committee has received the written disclosures and the letter from the independent registered public accounting firm required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent registered public accounting firm's communications with the Audit Committee concerning independence and has discussed with the independent registered public accounting firm the independent registered public accounting firm's independence.
The Audit Committee has recommended, and the Board of Directors, in the exercise of its business judgement, has approved, inclusion of the Company's audited consolidated financial statements in the Company's annual report on Form 10-K for the year ended 31 December 2019,2021, to be filed with the U.S. Securities and Exchange Commission (the "SEC").SEC. The recommendation was based upon the Audit Committee's review, the exercise of its business judgement, the discussions referred to above and reliance upon the Company's management and independent registered public accounting firm.
Submitted by the Audit Committee:
In accordance with the recommendation of our Audit Committee, our Board approved inclusion of the audited consolidated financial statements in our annual report on Form 10-K for the year ended 31 December 2019,2021, and all of our directors acknowledged such approval by signing the annual report on Form 10-K as filed with the SEC on 2122 February 2020.2022.
Neither the Board among others, areof Directors nor management intend to review and approve executive officer compensation and employee compensation matters, including matters regarding the Company's various benefit plans, and to continually assess the effectiveness of these programmes in consideration of the stated compensation strategy, independently or in conjunction with the Board, as appropriate. The Compensation Committee operates independently of management and in consultation with its compensation consultant.
| NEO | Salary as of 1 January 2019 | Salary as of 1 January 2020 | Percent Change |
Thomas P. Burke(1) | Not Applicable | $855,000 | Not Applicable |
Carl G. Trowell(2) | £600,000 | £450,000 | -25% |
| Jonathan Baksht | $510,000 | $550,000 | 8% |
| Gilles Luca | $450,000 | $525,000 | 17% |
| Michael T. McGuinty | $490,000 | $510,000 | 4% |
| Alan Quintero | Not Applicable | $415,000 | Not Applicable |
| P. Carey Lowe | $620,000 | Not Applicable | Not Applicable |
| John S. Knowlton | $450,000 | Not Applicable | Not Applicable |
| Performance Measure | 2019 Performance Goals | Actual Performance | Resulting % of Target Earned | Weighting | Weighted % of Target Earned | |||||
| Threshold | Target | Maximum | x | |||||||
| EBITDA (000s) | $175,000 | $220,000 | $255,000 | $205,700 | 84.10% | 40% | 33.6% | |||
| Synergies (000s) | $101,800 | $121,800 | $141,800 | $132,000 | 151.0% | 20% | 30.2% | |||
| PSI | 0.15 | 0.10 | 0.08 | 0.03 | 200.0% | 5% | 10.0% | |||
| TRIR | 0.40 | 0.35 | 0.30 | 0.28 | 200.0% | 5% | 10.0% | |||
| Downtime - Floaters | 4.50% | 3.50% | 3.00% | 4.12% | 69.0% | 5% | 3.5% | |||
| Downtime - Jackups | 2.10% | 1.60% | 1.35% | 1.61% | 99.0% | 5% | 5.0% | |||
| STGs | 1.00 | 2.00 | 3.00 | 2.402 | 120.1% | 20% | 24.0% | |||
| TOTAL | 100% | 116.3% | ||||||||
| NEO | 2019 Target Opportunity (% of Salary) | 2019 Target Opportunity ($)(1) | x | ECIP Payout % | + | Discretionary Adjustment | = | Formula-Derived ECIP Award |
| Thomas P. Burke | 110% | $758,699 | 116.3% | 0 | $882,367 | |||
Carl G. Trowell (2) | 110% | £540,206 | 116.3% | 0 | £628,260 | |||
Jonathan Baksht (3) | 83% | $442,885 | 116.3% | 0 | $515,075 | |||
Gilles Luca (4) | 80% | $367,326 | 116.3% | 0 | $427,200 | |||
Michael T. McGuinty (3) (5) | 76% | $381,110 | 116.3% | $175,000 | $618,231 | |||
Alan Quintero (3) (6) | 64% | $199,908 | 116.3% | $50,000 | $282,493 | |||
| P. Carey Lowe | 90% | $558,000 | 116.3% | 0 | $648,954 | |||
| John S. Knowlton | 70% | $112,192 | 116.3% | 0 | $130,479 | |||
| Grant Cycle | 2017 | 2018 | 2019 | 2020 | 2021 |
| 2017 - 2019 Grant | X | Earned at 72% of target value | |||
| 2018 - 2020 Grant | X | ||||
| 2019 - 2021 Grant | X | ||||
| Grant cycle | |||||
| X | Grant date | ||||
Valaris Rank Against Peers | 2019 - 2021 Award Multiplier (8 peers) | ||
| 1 | 2.00 | ||
| 2 | 2.00 | ||
| 3 | 1.67 | ||
| 4 | 1.33 | ||
| 5 | 1.00 | ||
| 6 | 0.75 | ||
| 7 | 0.50 | ||
| 8 | 0.00 | ||
| 9 | 0.00 | ||
| Performance Measure | Actual Performance | Corresponding Multiplier | Weight | Weighted Average Multiplier | |||||||||||
| = | |||||||||||||||
| Relative TSR | 6 of 7 | 0 | 50 | % | — | % | |||||||||
| Relative ROCE | 3 of 7 | 1.44 | 50 | % | 72 | % | |||||||||
| TOTAL | 72 | % | |||||||||||||
| NEO | 2017 - 2019 Performance Unit Awards Target Value | Weighted Average Multiplier | Total Value of Performance Units Earned | ||||||||||
| x | |||||||||||||
| = | |||||||||||||
Carl G. Trowell(1) | $ | 2,500,000 | — | % | $ | — | |||||||
| Jonathan Baksht | $ | 675,000 | 72 | % | $ | 486,000 | |||||||
| Gilles Luca | $ | 675,000 | 72 | % | $ | 486,000 | |||||||
| Michael T. McGuinty | $ | 600,000 | 72 | % | $ | 432,000 | |||||||
P. Carey Lowe(2) | $ | 1,000,000 | — | % | $ | — | |||||||
John S. Knowlton(3) | $ | 600,000 | 100 | % | $ | 600,000 | |||||||
EXECUTIVE COMPENSATION
Summary Compensation Table
The table below summarisessets forth the total compensation paid or awarded to each of our NEOs for the fiscal years ended 31 December 2019, 20182021 and 2017:2020. Messrs. Dibowitz, Gibbins, Luca and Quintero were not NEOs for the fiscal year ended 31 December 2020.
Summary Compensation Table
| Name and Principal Position | Year | Salary ($)(1) | Bonus ($)(2) | Share Awards ($)(3) | Non-Equity Incentive Plan Compensation ($)(4) | Change in Pension Value and NQDC Earnings(5) | All Other Compensation ($)(6) | Total ($) | |||||||||||||||
Thomas P. Burke President and Chief Executive Officer | 2019 | 676,927 | — | — | 882,367 | 167,766 | 4,228,794 | 5,955,854 | |||||||||||||||
| Carl G. Trowell | 2019 | 629,168 | — | 4,999,996 | 802,288 | — | 5,071,499 | 11,502,951 | |||||||||||||||
| Executive Chairman | 2018 | 801,600 | 1,202,400 | 3,750,000 | 762,722 | — | 102,007 | 6,618,729 | |||||||||||||||
| 2017 | 772,800 | 1,159,200 | 3,750,025 | 1,083,002 | — | 92,236 | 6,857,263 | ||||||||||||||||
| Jonathan Baksht | 2019 | 533,333 | — | 1,349,997 | 1,001,075 | — | 471,818 | 3,356,223 | |||||||||||||||
| Executive Vice President and Chief Financial Officer | 2018 | 510,000 | 637,500 | 1,012,502 | 352,920 | — | 657,544 | 3,170,466 | |||||||||||||||
| 2017 | 510,000 | 637,500 | 1,012,515 | 519,792 | — | 412,830 | 3,092,637 | ||||||||||||||||
| Gilles Luca | 2019 | 456,250 | — | 1,349,997 | 913,200 | — | 622,711 | 3,342,158 | |||||||||||||||
| Senior Vice President, Chief Operating Officer | 2018 | 450,000 | 450,000 | 1,012,502 | 311,400 | — | 676,470 | 2,900,372 | |||||||||||||||
| 2017 | 450,000 | 450,000 | 1,012,515 | 458,640 | — | 505,375 | 2,876,530 | ||||||||||||||||
Alan Quintero Senior Vice President, Business Development | 2019 | 288,750 | 50,000 | 866,257 | 232,493 | 7,697 | 12,130 | 1,457,327 | |||||||||||||||
Michael T. McGuinty Senior Vice President, General Counsel and Secretary | 2019 | 501,667 | 175,000 | 1,200,000 | 875,231 | — | 410,758 | 3,162,656 | |||||||||||||||
| P. Carey Lowe | 2019 | 620,000 | — | 1,999,988 | 648,954 | — | 439,961 | 3,708,903 | |||||||||||||||
Former Executive Vice President and Chief Operating Officer | 2018 | 620,000 | 775,000 | 1,500,006 | 482,670 | — | 732,987 | 4,110,663 | |||||||||||||||
| 2017 | 620,000 | 775,000 | 1,500,027 | 710,892 | — | 559,812 | 4,165,731 | ||||||||||||||||
John S. Knowlton Former Senior Vice President, Technical | 2019 | 171,135 | — | 2,288,168 | 430,479 | — | 810,650 | 3,700,432 | |||||||||||||||
Name and Principal Position (1) | Year | Salary ($)(2) | Bonus ($)(3) | Share Awards ($)(4) | Non-Equity Incentive Plan Compensation ($)(5) | All Other Compensation ($)(6) | Total ($) | |||||||||||||||||||||||||||||||||||||||||||
| Anton Dibowitz | 2021 | 271,115 | — | 14,683,726 | 432,426 | 31,832 | 15,419,099 | |||||||||||||||||||||||||||||||||||||||||||
President and Chief Executive Officer | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Darin Gibbins | 2021 | 308,077 | 28,000 | 370,271 | 295,969 | 747 | 1,003,064 | |||||||||||||||||||||||||||||||||||||||||||
| Interim Chief Financial Officer and Vice President, Investor Relations and Treasurer | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Gilles Luca | 2021 | 525,000 | — | 3,921,762 | 1,067,794 | 424,162 | 5,938,718 | |||||||||||||||||||||||||||||||||||||||||||
| Senior Vice President, Chief Operating Officer | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Thomas P. Burke | 2021 | 707,898 | — | 10,897,489 | 2,833,923 | 4,048,603 | 18,487,913 | |||||||||||||||||||||||||||||||||||||||||||
| Former President and Chief Executive Officer | 2020 | 855,000 | 1,282,500 | 1,423,447 | 3,397,129 | 609,014 | 7,567,090 | |||||||||||||||||||||||||||||||||||||||||||
| Jonathan Baksht | 2021 | 463,798 | — | 4,138,749 | 1,234,713 | 2,108,206 | 7,945,466 | |||||||||||||||||||||||||||||||||||||||||||
| Former Executive Vice President and Chief Financial Officer | 2020 | 550,000 | 1,375,000 | 582,699 | 1,628,022 | 83,847 | 4,219,568 | |||||||||||||||||||||||||||||||||||||||||||
| Alan Quintero | 2021 | 387,904 | — | 2,786,991 | 862,640 | 874,054 | 4,911,589 | |||||||||||||||||||||||||||||||||||||||||||
| Former Senior Vice President, Business Development | ||||||||||||||||||||||||||||||||||||||||||||||||||
____________________
(1) |
Mr. Trowell's base salaryDibowitz was appointed as Interim President and Chief Executive Officer effective 3 September 2021 and as President and Chief Executive Officer effective 8 December 2021. Mr. Gibbins was appointed as Interim Chief Financial Officer effective 3 September 2021.
Messrs. Burke, Baksht and Quintero each stepped down from their executive roles at the Company on 2 September 2021, with separation from the Company occurring on 15 September 2021.
(2)The amounts disclosed in this column include amounts voluntarily deferred under the Ensco Savings Plan, our tax-qualified 401(k) retirement plan.
(3)The amount disclosed in this column for Mr. Gibbins represents a one-time bonus paid upon our emergence from bankruptcy.
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The amounts disclosed in this column for 2020 consist of cash retention payments awarded to Messrs. Burke and Baksht in February and May 2020. As a condition of receipt of these payments, each NEO was required to forfeit all previously granted 2020 restricted share units ("RSUs") and 2020 performance units. In addition, Mr. Burke's full retention bonus and a total of $1.1 million of Mr. Baksht's was subject to repayment on an after-tax basis in the event the former NEO would have resigned without good reason or had been terminated for cause prior to the earlier of 15 May 2021, a change in control or completion of our financial restructuring.
(4)The amounts disclosed in this column represent the aggregate grant date fair value of RSUs granted in 2021 and 2020 and performance share units ("PSUs") granted in 2021 as follows:
| Name | Grant Year | Restricted Share Units (#) | Restricted Share Units ($) | Performance Share Unit Awards (#) | Performance Share Unit Awards ($) | Total ($)(c) | |||||||||||||||||||||||||||||
| Anton Dibowitz | 2021 | 121,738 | (a) | 3,853,145 | 624,920 | 10,830,581 | 14,683,726 | ||||||||||||||||||||||||||||
| Darin Gibbins | 2021 | 14,799 | 370,271 | n/a | (b) | n/a | 370,271 | ||||||||||||||||||||||||||||
| Gilles Luca | 2021 | 41,403 | 1,035,903 | 212,532 | 2,885,859 | 3,921,762 | |||||||||||||||||||||||||||||
| Thomas P. Burke | 2021 | 115,047 | (c) | 2,878,476 | 590,570 | (c) | 8,019,013 | 10,897,489 | |||||||||||||||||||||||||||
| 2020 | 466,704 | (d) | 1,423,447 | — | — | 1,423,447 | |||||||||||||||||||||||||||||
| Jonathan Baksht | 2021 | 43,695 | (c) | 1,093,249 | 224,289 | (c) | 3,045,500 | 4,138,749 | |||||||||||||||||||||||||||
| 2020 | 191,049 | (d) | 582,699 | — | — | 582,699 | |||||||||||||||||||||||||||||
| Alan Quintero | 2021 | 29,424 | (c) | 736,188 | 151,034 | (c) | 2,050,803 | 2,786,991 | |||||||||||||||||||||||||||
____________________
(a)Includes 18,434 RSUs with a grant date fair value of $546,384 awarded to Mr. Dibowitz on 1 July 2021, upon his appointment to the Board, prior to his employment by the Company effective 3 September 2021. A total of 12,930 of such RSUs vest ratably in three annual installments and 5,504 of such RSUs vest in full on the first anniversary of the date of grant or the Company’s next annual shareholder’s meeting, whichever occurs first.
(b)Mr. Gibbins was not an executive officer as of July 2021 and did not receive an award of PSUs in 2021. He participated in our non-executive officer long-term incentive program and received his 2021 award entirely in the form of time-based RSUs that vest and settle ratably in three equal annual installments. See "Narrative Disclosure to Summary Compensation Table" below for additional information.
(c)Messrs. Burke, Baksht and Quintero were each granted awards, which were forfeited upon their respective separations from the Company and never realized any value from the grants. However, in accordance with SEC disclosure requirements, the full grant date value of such awards is denominatedreflected in pound sterling ("GBP"). However, for disclosure purposes, his annual base salary was converted to U.S. Dollars ("USD") using the exchange rate“Share Awards” column of 1.277, 1.336 and 1.288 for 2019, 2018 and 2017, respectively, which represents the average exchange rate over such years.Summary Compensation Table above.
| Year | Restricted Share Awards/Units ($) | Performance Unit Awards ($) | Total ($) | |||||||
Carl G. Trowell(a) | 2019 | 2,499,996 | 2,500,000 | 4,999,996 | ||||||
| 2018 | 2,500,000 | 1,250,000 | 3,750,000 | |||||||
| 2017 | 2,500,025 | 1,250,000 | 3,750,025 | |||||||
| Jonathan Baksht | 2019 | 674,997 | 675,000 | 1,349,997 | ||||||
| 2018 | 675,002 | 337,500 | 1,012,502 | |||||||
| 2017 | 675,015 | 337,500 | 1,012,515 | |||||||
| Gilles Luca | 2019 | 674,997 | 675,000 | 1,349,997 | ||||||
| 2018 | 675,002 | 337,500 | 1,012,502 | |||||||
| 2017 | 675,015 | 337,500 | 1,012,515 | |||||||
Alan Quintero(b) | 2019 | 866,257 | — | 866,257 | ||||||
| Michael T. McGuinty | 2019 | 600,000 | 600,000 | 1,200,000 | ||||||
P. Carey Lowe(c) | 2019 | 999,988 | 1,000,000 | 1,999,988 | ||||||
| 2018 | 1,000,006 | 500,000 | 1,500,006 | |||||||
| 2017 | 1,000,027 | 500,000 | 1,500,027 | |||||||
John S. Knowlton(d) | 2019 | 1,038,168 | 1,250,000 | 2,288,168 | ||||||
| Restricted Share Awards/Units | Performance Unit Awards | Total | |||||||||
| John S. Knowlton | $ | 438,168 | $ | 650,000 | $ | 1,088,168 | |||||
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The 2021 performance share unit awards are payable in shares and allocated based on three performance goals and subject to achievement of those performance goals based on (a) designated share price hurdles whereby our closing stock price must equal or exceed certain market price targets for ninety consecutive trading days (the "Share Price PSUs"); (b) relative return on capital employed ("Relative ROCE") as compared to a specified peer group, all as defined in the award agreements (the "Relative ROCE PSUs") and (c) specified strategic goals as established by the Compensation Committee (the "Strategic PSUs"). All such PSUs are payable in equity following a three-year performance period with the final payout ranging from 0% to 150% of target units granted based on performance against the applicable objectives. See "Narrative Disclosure to Summary Compensation Table — 2021 Long-Term Incentive Awards" below for additional information on the 2021 PSU awards' targets.
The grant-date fair value per unit for the Relative ROCE PSUs and the Strategic PSUs was equal to the closing price of the Company's common shares on the grant date, which was $25.02 for the awards to Messrs. Luca, Burke, Baksht and Quintero on 19 July 2021 and $32.01 for the awards to Mr. Dibowitz on 8 December 2021. As only the first year’s strategic goals for the Strategic PSUs were established in 2021, only such portion of the award is deemed granted for financial accounting purposes and included in the table above.The remaining portions of the Strategic PSUs will be deemed granted for financial accounting purposes and reported for the 2022 fiscal year and 2023 fiscal year, respectively. The Share Price PSUs were valued at the date of grant using a Monte Carlo simulation, which included assumptions related to expected price volatility, the risk free interest rate and expected dividend yield which were:
•67%, 0.37% and nil, respectively for Messrs. Luca, Burke, Baksht and Quintero's grant on 19 July 2021 resulting in a fair value per Stock Price PSU of $11.04; and
•58%, 0.85% and nil, respectively, for Mr. Dibowitz's grant on 8 December 2021 resulting in a fair value per Stock Price PSU of $14.07.
The expected price volatility assumption is estimated using market data for certain peer companies during periods in which our own trading history is limited. As our trading history increases, it will bear greater weight in determining our expected price volatility assumption.
While the table above represents the grant-date fair value of the PSUs granted, if the maximum level of payout iswere to be achieved underby Messrs. Dibowitz and Luca, or would have been achieved in the 2019 Relative TSR performance unit award grants,case of former executives Messrs. Burke, Baksht and Quintero, the aggregate grant date fair value of such awardsthe 2021 PSU award based on the closing price on the date of grant would be as follows:
| Maximum Payout | ||||
| Carl G. Trowell | $ | 5,000,000 | ||
| Jonathan Baksht | $ | 1,350,000 | ||
| Gilles Luca | $ | 1,350,000 | ||
| Michael T. McGuinty | $ | 1,200,000 | ||
| P. Carey Lowe | $ | 2,000,000 | ||
| John S. Knowlton | $ | 1,200,000 | ||
| Name | Maximum Payout ($) | |||||||
| Anton Dibowitz | 21,822,241 | |||||||
| Gilles Luca | 5,800,962 | |||||||
| 16,119,333 | ||||||||
Jonathan Baksht (a) | 6,121,877 | |||||||
Alan Quintero (a) | 4,122,393 | |||||||
(a)These 2021 PSU awards were forfeited upon each former executive's respective separation from the Company and never realized any value from the grants.
(5)The amounts disclosed in this column represent bonuses earned for the 2021 and 2020 plan years pursuant to the Valaris Cash Incentive Plan ("VCIP"). In 2019,connection with the Company's bankruptcy proceedings, the VCIP was designed to provide for quarterly incentives earned over the period of 1 April 2020 through 30 June 2021 based on the achievement of personal safety, process safety, downtime and expense reduction performance metrics. For the fourth quarter 2020, and the first and second quarter 2021 programs, earnings before interest, tax, depreciation and amortization ("EBTIDA") was added as a performance metric. The second quarter 2020 and third quarter 2020 VCIP were prepaid at 100% of target in June 2020. Upon bankruptcy court approval, the Company resumed payments under the VCIP, subject to certain revisions. The revisions resulted in a true-up to the second quarter and third quarter 2020 performance awards, which were paid in 2021 upon the Company’s emergence from bankruptcy. The earned fourth quarter 2020 VCIP was paid in February 2021 but is reflected as a 2020 amount as it pertains to performance in the 2020 period. Additionally, the first and second quarter 2021 VCIP amounts, which were based on the metrics originally established in 2020, as revised by the bankruptcy court, are included in this column for the first half of 2021.
35
The VCIP for the second half of 2021 ("2H 2021 VCIP") was designed to provide for a six month incentive earned over the period 1 July 2021 to 31 December 2021, based on the achievement of personal safety, process safety, downtime reduction, backlog addition and earnings before interest, tax, depreciation, amortization and reactivation costs ("EBITDAR") performance metrics. Although the 2H 2021 VCIP amounts were not paid by 31 December 2021, amounts shown in this column include all amounts earned for the six month period 01 July 2021 through 31 December 2021, which were paid in March 2022. The 2H 2021 VCIP was approved by the Compensation Committee to motivate our executives to achieve key near-term goals for the remainder of the 2021 fiscal year that were designed to position the Company for long-term success before we returned to a more traditional annual cash incentive program in 2022.
See “Narrative Disclosures to Summary Compensation Table” section for more discussion on the 2020 and 2021 VCIP.
For Mr. Baksht, the 2020 amounts disclosed in this column also include thea $425,250 payout of the relative ROCE component of the performance awards granted to him in 2017. The components of2018.
(6)See the 2019 amounts are as follows:"All Other Compensation Table" below.
36
| 2019 ECIP | 2017 Relative ROCE Payout | Total Value Earned | |||||||||
| Thomas P. Burke | $ | 882,367 | $ | — | $ | 882,367 | |||||
| Carl G. Trowell | $ | 802,288 | $ | — | $ | 802,288 | |||||
| Jonathan Baksht | $ | 515,075 | $ | 486,000 | $ | 1,001,075 | |||||
| Gilles Luca | $ | 427,200 | $ | 486,000 | $ | 913,200 | |||||
| Alan Quintero | $ | 232,493 | $ | — | $ | 232,493 | |||||
| Michael T. McGuinty | $ | 443,231 | $ | 432,000 | $ | 875,231 | |||||
| P. Carey Lowe | $ | 648,954 | $ | — | $ | 648,954 | |||||
| John S. Knowlton | $ | 130,479 | $ | 300,000 | $ | 430,479 | |||||
All Other Compensation Table
The table below summarisessets forth the overseas allowances, premiums paid for group term life insurance, contributions to various benefit plans we sponsorcash severance and certain other payments described below for the fiscal year ended 31 December 2019:2021:
All Other Compensation Table
For the Year Ended 31 December 20192021
| Name | Overseas Allowances ($)(1) | Group Term Life Insurance ($)(2) | Cash Severance ($)(3) | Other ($)(4) | Total ($) | |||||||||||||||||||||||||||||||||||||||||||||
| Anton Dibowitz | — | 582 | — | 31,250 | 31,832 | |||||||||||||||||||||||||||||||||||||||||||||
| Darin Gibbins | — | 747 | — | — | 747 | |||||||||||||||||||||||||||||||||||||||||||||
| Gilles Luca | 411,129 | 1,323 | — | 11,710 | 424,162 | |||||||||||||||||||||||||||||||||||||||||||||
| Thomas P. Burke | 321,675 | 1,418 | 3,639,128 | 86,382 | 4,048,603 | |||||||||||||||||||||||||||||||||||||||||||||
| Jonathan Baksht | — | 960 | 2,035,000 | 72,246 | 2,108,206 | |||||||||||||||||||||||||||||||||||||||||||||
| Alan Quintero | — | 803 | 828,000 | 45,251 | 874,054 | |||||||||||||||||||||||||||||||||||||||||||||
| Name | Overseas Allowances(1) | Group Term Life Insurance(2) | Defined Contribution Savings Plans(3) | SERP(4) | Dividends on Share Awards(5) | Payment in Lieu of Profit Share/Match(6) | Other(7)(8)(9)(10) | Total | ||||||||||||||||||||||||
| Thomas P. Burke | $ | 449,851 | $ | 973 | $ | — | $ | 23,750 | $ | — | $ | — | $ | 3,754,220 | $ | 4,228,794 | ||||||||||||||||
| Carl G. Trowell | $ | — | $ | 628 | $ | — | $ | — | $ | 39,413 | $ | 31,458 | $ | 5,000,000 | $ | 5,071,499 | ||||||||||||||||
| Jonathan Baksht | $ | 417,620 | $ | 1,128 | $ | 13,542 | $ | 14,104 | $ | 9,695 | $ | — | $ | 15,729 | $ | 471,818 | ||||||||||||||||
| Gilles Luca | $ | 565,860 | $ | 1,025 | $ | 19,000 | $ | 25,375 | $ | 10,451 | $ | — | $ | 1,000 | $ | 622,711 | ||||||||||||||||
| Alan Quintero | $ | — | $ | 759 | $ | 7,190 | $ | — | $ | — | $ | — | $ | 4,181 | $ | 12,130 | ||||||||||||||||
| Michael T. McGuinty | $ | 349,555 | $ | 1,119 | $ | 49,000 | $ | — | $ | 9,271 | $ | — | $ | 1,813 | $ | 410,758 | ||||||||||||||||
| P. Carey Lowe | $ | 378,403 | $ | 1,034 | $ | 19,500 | $ | 17,000 | $ | 15,629 | $ | — | $ | 8,395 | $ | 439,961 | ||||||||||||||||
| John S. Knowlton | $ | 20,221 | $ | 338 | $ | 8,182 | $ | 938 | $ | 9,271 | $ | — | $ | 771,700 | $ | 810,650 | ||||||||||||||||
| (1)See table immediately below for details of Overseas allowances and reimbursements paid to our NEOs for the |
Cost of Living Allowance | Foreign Service Premium | Housing Allowance | Tax Equalisation | Dependent Tuition Allowance | Other(a) | Total | ||||||||||||||||||||||
| Thomas P. Burke | $ | 14,583 | $ | — | $ | 93,333 | $ | 137,467 | $ | 90,000 | $ | 114,468 | $ | 449,851 | ||||||||||||||
| Carl G. Trowell | $ | — | $ | — | $ | — | $ | — | — | $ | — | $ | — | |||||||||||||||
| Jonathan Baksht | $ | 14,123 | $ | — | $ | 75,106 | $ | 160,446 | 2,500 | $ | 165,445 | $ | 417,620 | |||||||||||||||
| Gilles Luca | $ | — | $ | 68,438 | $ | 64,794 | $ | 412,558 | — | $ | 20,070 | $ | 565,860 | |||||||||||||||
| Alan Quintero | $ | — | $ | — | $ | — | $ | — | — | $ | — | $ | — | |||||||||||||||
| Michael T. McGuinty | $ | 24,000 | $ | — | $ | 133,560 | $ | 155,009 | 35,328 | $ | 1,658 | $ | 349,555 | |||||||||||||||
| P. Carey Lowe | $ | 24,000 | $ | — | $ | 145,380 | $ | 205,618 | — | $ | 3,405 | $ | 378,403 | |||||||||||||||
| John S. Knowlton | $ | — | $ | — | $ | — | $ | 20,221 | — | $ | — | $ | 20,221 | |||||||||||||||
| Name | Cost of Living Allowance ($) | Housing Allowance ($) | Tax Equalization ($) | Dependent Tuition Allowance ($) | Other ($)(a) | Total ($) | ||||||||||||||||||||||||||||||||||||||
| Gilles Luca | 24,000 | 133,560 | 204,928 | 20,413 | 28,228 | 411,129 | ||||||||||||||||||||||||||||||||||||||
| Thomas P. Burke | 18,750 | 120,000 | 150,430 | — | 32,495 | 321,675 | ||||||||||||||||||||||||||||||||||||||
(a) The Other column consists of relocation expenses for Messrs. Luca and Burke.
(2)The amounts disclosed in this column represent the Year Ended 31 December group term life insurance premiums paid for each NEO.
(3)2019The amounts disclosed in this column represent the lump sum cash severance payment made to Messrs. Burke, Baksht and Quintero as a result of the separation of these former executives.
(4)The amounts disclosed for Mr. Dibowitz relate to cash fees received for services on the Board prior to his commencing employment with the Company on 3 September 2021, including a $25,000 retainer fee, $3,750 for his role as the Strategy Committee Chair and $2,500 for his role on two other Board committees. The amounts disclosed for Mr. Luca include $6,289 related to tax preparation fees and $5,421 related to a vehicle lease. The amounts disclosed for Mr. Burke include $43,269 related to retainer fees for service as a board member of Saudi Aramco Rowan Offshore Drilling Company ("ARO"), $26,082 in reimbursement of legal fees in connection with the finalization of his separation and release agreement as well as certain other advisory matters, $9,077 in subsidized COBRA premiums, $7,234 related to tax preparation fees and a $720 U.S. tax gross-up on certain third party professional fees. The amounts disclosed for Mr. Baksht include $24,539 for reimbursement of legal fees in connection with the finalization of his separation and release agreement as well as certain other advisory matters, $20,000 in Company-paid outplacement service fees, $15,921 for a U.S. tax gross-up on certain third party professional fees, $8,144 for tax preparation fees and $3,642 in subsidized COBRA premiums. The amounts disclosed for Mr. Quintero include $20,000 in Company-paid outplacement service fees, $8,144 related to tax preparation fees, $7,930 for reimbursement of legal fees in connection with the finalization of his separation and release agreement, $5,145 related to U.S. tax gross-up on certain third party professional fees and $4,032 in subsidized COBRA premiums.
37
| Name | Grant Date | Approval Date | Estimated Future Payouts Under Equity Incentive Plan Awards(1)(3)(4) | Payouts Under Non-Equity Incentive Plan Awards(2) | All Other Restricted Share Awards (#)(5) | Grant Date Fair Value of Restricted Share & Performance Awards ($) | |||||||||||||
Threshold ($) | Target ($) | Maximum ($) | Threshold ($) | Target ($) | Maximum ($) | ||||||||||||||
| Thomas P. | 3/6/2019 | 3/6/2019 | — | — | |||||||||||||||
| Burke | 3/6/2019 | 3/6/2019 | — | — | — | — | |||||||||||||
| 2/25/2019 | 2/25/2019 | 379,350 | 758,699 | 1,517,398 | N/A | ||||||||||||||
| Carl G. | 3/6/2019 | 3/6/2019 | 148,104 | 2,499,996 | |||||||||||||||
| Trowell | 3/6/2019 | 3/6/2019 | 1,250,000 | 2,500,000 | 5,000,000 | 2,500,000 | |||||||||||||
| 2/25/2019 | 2/25/2019 | 344,922 | 689,843 | 1,379,686 | N/A | ||||||||||||||
| Jonathan | 3/6/2019 | 3/6/2019 | 39,988 | 674,997 | |||||||||||||||
| Baksht | 3/6/2019 | 3/6/2019 | 337,500 | 675,000 | 1,350,000 | 675,000 | |||||||||||||
| 2/25/2019 | 2/25/2019 | 221,443 | 442,885 | 885,770 | N/A | ||||||||||||||
| Gilles | 3/6/2019 | 3/6/2019 | 39,988 | 674,997 | |||||||||||||||
| Luca | 3/6/2019 | 3/6/2019 | 337,500 | 675,000 | 1,350,000 | 675,000 | |||||||||||||
| 2/25/2019 | 2/25/2019 | 183,663 | 367,326 | 734,652 | N/A | ||||||||||||||
| Alan | 6/3/2019 | 5/2/2019 | 98,775 | 866,257 | |||||||||||||||
| Quintero | 3/6/2019 | 3/6/2019 | — | — | |||||||||||||||
| 3/6/2019 | 3/6/2019 | — | — | — | — | ||||||||||||||
| 2/25/2019 | 2/25/2019 | 99,954 | 199,908 | 399,816 | N/A | ||||||||||||||
| Michael | 6/3/2019 | 6/3/2019 | 35,545 | 600,000 | |||||||||||||||
| McGuinty | 3/6/2019 | 3/6/2019 | 300,000 | 600,000 | 1,200,000 | 600,000 | |||||||||||||
| 2/25/2019 | 2/25/2019 | 190,555 | 381,110 | 762,220 | N/A | ||||||||||||||
| P. Carey | 6/3/2019 | 6/3/2019 | 59,241 | 999,988 | |||||||||||||||
| Lowe | 3/6/2019 | 3/6/2019 | 500,000 | 1,000,000 | 2,000,000 | 1,000,000 | |||||||||||||
| 2/25/2019 | 2/25/2019 | 279,000 | 558,000 | 1,116,000 | N/A | ||||||||||||||
| John S. | 6/3/2019 | 6/3/2019 | 35,545 | 600,000 | |||||||||||||||
| Knowlton | 3/6/2019 | 3/6/2019 | 300,000 | 600,000 | 1,200,000 | 600,000 | |||||||||||||
| 2/25/2019 | 2/25/2019 | 56,096 | 112,192 | 224,384 | N/A | ||||||||||||||
Mr. Trowell's threshold,Dibowitz’s Compensation Arrangements
When Mr. Dibowitz was appointed to our Board in July 2021, he participated in our director compensation program (See“Director Compensation” section below), which included annual and emergence director equity grants. On 3 September 2021, he was appointed as our Interim President and Chief Executive Officer, at which time the Board approved a monthly base salary of $71,250 and participation in our annual short-term incentive bonus plan. His targeted annualized incentive award was set at 110% of his base salary, and his bonus for 2021 was earned under our previously approved second half bonus program and pro-rated for Mr. Dibowitz’s period of employment (See“2021 Cash-Based Awards” below).
On 8 December 2021, Mr. Dibowitz was appointed as our President and Chief Executive Officer and entered into an employment agreement with Valaris and Ensco Corporate Resources LLC (the “Dibowitz Employment Agreement”). Under the Dibowitz Employment Agreement, Mr. Dibowitz is entitled to an annual base salary of $950,000 and, effective as of 1 January 2022, a target annual bonus of 115% of his base salary. The Dibowitz Employment Agreement also includes severance provisions (See“Termination or Change in Control Payments and maximum estimated payoutsBenefits” below).
Mr. Gibbins’ Compensation Arrangements
On 3 September 2021, Mr. Gibbins was appointed as our interim Chief Financial Officer. In connection with his appointment, the Compensation Committee approved a monthly increase in his annual base salary of $10,000, which was previously $255,000 per year. Mr. Gibbins’ target bonus under our 2021 second half bonus program was set at 50% of his annual base salary. In light of his interim role, Mr. Gibbins continues to participate in our Non-Executive Employee Severance Plan (See “Termination or Change in Control Payments and Benefits” below).
Mr. Luca’s Compensation Arrangements
Mr. Luca’s annual base salary for 2021 was set at $525,000 and his target bonus under our 2021 second half bonus program was set at 85% of his annual base salary. In August 2021, the 2019 ECIPCommittee approved a special cash bonus award are denominatedfor Mr. Luca in GBP. However,the amount of $1,500,000, which becomes payable in three equal installments in July 2022, August 2022 and February 2023, subject to Mr. Luca’s continued employment through each applicable payment date. Any unpaid portion of the award will accelerate and pay out in the event of his termination without cause, death or disability. Mr. Luca also participates in the Valaris Executive Severance Plan (See “Termination and Change in Control Payments and Benefits” below).
Mr. Burke’s Separation
On 2 September 2021, Mr. Burke stepped down from his position as our President and Chief Executive Officer and as a member of the Board. Mr. Burke continues to serve as a member of the Board of Managers of Saudi Aramco Rowan Offshore Drilling Company (the “ARO Board”), our 50/50 joint venture with Saudi Aramco. Mr. Burke receives an annualized retainer of $150,000 for disclosure purposes, these values were convertedhis service on the ARO Board, which is paid quarterly in arrears.
In connection with his separation, and pursuant to USD,the terms of his then current employment agreement, Mr. Burke received: (a) cash severance payments totaling $3,639,128; (b) a pro-rated second half 2021 bonus in the amount of $277,473 based on actual performance for the 6-month period; (c) subsidized COBRA premiums for up to 24 months with a total potential value of $72,612; and (d) reimbursement of £3,480, or $4,737 using the exchange rate of 1.36 on the date the payment was made, in legal fees in connection with the finalization of his separation and release agreement. Mr. Burke forfeited all outstanding equity awards upon his separation of employment.
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Mr. Baksht’s Separation
On 2 September 2021, Mr. Baksht, stepped down from his role as our Executive Vice President and Chief Financial Officer. In connection with his separation, Mr. Baksht received the following severance benefits pursuant to the terms of the Valaris Executive Severance Plan: (a) a cash severance payment of $2,035,000; (b) a bonus for the second half of 2021 based on actual performance for the six-month period in the amount of $329,588; (c) subsidized COBRA premiums for up to 12 months with a total potential value of $14,570; (d) Company-paid outplacement service fees of $20,000 and (e) reimbursement of $8,247 in legal fees in connection with the finalization of his separation and release agreement. Mr. Baksht forfeited all outstanding equity awards upon his separation of employment.
Mr. Quintero’s Separation
On 2 September 2021, Mr. Quintero, stepped down from his role as our Senior Vice President – Business Development. In connection with his separation, Mr. Quintero received the following severance benefits pursuant to the terms of the Valaris Executive Severance Plan: (a) a cash severance payment of $828,000; (b) a bonus for the second half of 2021 in the amount of $259,440; (c) subsidized COBRA premiums for up to 12 months with a total potential value of $16,127; (d) Company-paid outplacement service fees of $20,000; and (e) reimbursement of $7,930 in legal fees in connection with the finalization of his separation and release agreement. Mr. Quintero forfeited all outstanding equity awards upon his separation of employment.
2021 Cash-Based Awards
In connection with the Company's bankruptcy proceedings, the VCIP was designed to provide for quarterly incentives over the period of 1 April 2020 through 30 June 20211.277. , which wasUnder the average rate during 2019.2021 first and second quarter programs, each participating executive’s quarterly incentives could be earned at levels ranging from 0% to 150% of the target award value based on the achievement of the following performance metrics:
•personal safety (weighted 15%);
•process safety (weighted 15%);
•downtime (weighted 20%);
•expense reduction (weighted 20%); and
•adjusted EBITDA (weighted 30%)
First Quarter 2021 Program
During the first quarter 2021, the Company achieved the maximum level of results under the VCIP for all safety, operational and financial performance metrics resulting in a payout of 150% of target, representing the maximum payout opportunity. The threshold,performance targets and results for first quarter 2021 are as follows ($ amounts shown in millions):
| First Quarter 2021 Program | ||||||||||||||||||||||||||||||||
| Performance Metric | Threshold | Target | Maximum | Actual | Payout % | |||||||||||||||||||||||||||
Personal safety(1) | 1.000 | 0.915 | 0.830 | 0.730 | 22.5% | |||||||||||||||||||||||||||
Process safety(2) | 0.300 | 0.225 | 0.150 | 0.000 | 22.5% | |||||||||||||||||||||||||||
Downtime(3) | ||||||||||||||||||||||||||||||||
| Jackup downtime | 2.50% | 2.05% | 1.60% | 1.25% | 22.8% | |||||||||||||||||||||||||||
| Floater downtime | 5.50% | 4.75% | 4.00% | 2.31% | 7.2% | |||||||||||||||||||||||||||
Expense reduction(4) | $335.0 | $349.0 | $363.0 | $389.9 | 30.0% | |||||||||||||||||||||||||||
Adjusted EBITDA(5) | $21.6 | $31.6 | $41.6 | $42.8 | 45.0% | |||||||||||||||||||||||||||
| Final Earned Payout | 150% of target | |||||||||||||||||||||||||||||||
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Second Quarter 2021 Program
During the second quarter 2021, the Company achieved above target level results for all metrics with the exception of personal safety and jackup downtime. As a result, the second quarter 2021 bonus was earned at 110% of target. The performance targets and results for second quarter 2021 are as follows ($ amounts shown in millions):
| Second Quarter 2021 Program | ||||||||||||||||||||||||||||||||
| Performance Metric | Threshold | Target | Maximum | Actual | Payout % | |||||||||||||||||||||||||||
Personal safety(1) | 1.000 | 0.915 | 0.830 | 1.560 | 0.0% | |||||||||||||||||||||||||||
Process safety(2) | 0.300 | 0.225 | 0.150 | 0.000 | 22.5% | |||||||||||||||||||||||||||
Downtime(3) | ||||||||||||||||||||||||||||||||
| Jackup downtime | 2.50% | 2.05% | 1.60% | 2.37% | 9.6% | |||||||||||||||||||||||||||
| Floater downtime | 5.50% | 4.75% | 4.00% | 0.505% | 7.5% | |||||||||||||||||||||||||||
Expense reduction(4) | $352.0 | $369.0 | $386.0 | $419.9 | 30.0% | |||||||||||||||||||||||||||
Adjusted EBITDA(5) | $26.1 | $36.1 | $46.1 | $43.0 | 40.4% | |||||||||||||||||||||||||||
| Final Earned Payout | 110% of target | |||||||||||||||||||||||||||||||
(1)Personal safety is determined based on the Company’s recordable severity rate over the three-month period for the applicable quarter.
(2)Process safety is determined based on the Company’s process safety rate over the three-month period for the applicable quarter.
(3)Downtime is based on both jackup and floater downtime with the weighting between the two based on the active rig ratio calculated at the end of the applicable quarter.
(4)Expense reduction is based on the removal of onshore and offshore cost measured by annualizing the recurring run-rate associated with merger synergies generated from the 2019 merger of Ensco plc and Rowan Companies plc as well as cost reductions implemented in connection with a transformation program.
(5)Adjusted EBITDA is calculated as net gain (loss) from continuing operations before other income (expense), income tax expense (benefit), interest expense, depreciation, amortization, loss on impairment, equity in earnings of our 50/50 joint venture with Saudi Aramco, ARO, (gain) loss on asset disposals, transaction costs and significant non-recurring items, and is adjusted for non-cash items such as inventory reserve adjustments, share-based compensation, and accrued holding costs for newbuild drillships, and excludes reactivation costs and expenses related to incentive plan payouts in excess of target, and maximum payout levelsimpacts related to COVID-19; provided that such COVID-19 impacts must (a) be greater than 15% of a specific rig’s quarterly gross profit and (b) be related to (1) incremental crewing or travel costs due to COVID-19 logistical disruptions or (2) governmental or customer disruptions of operations due to COVID-19 concerns.
Set forth below are the target first quarter and second quarter 2021 VCIP award opportunities for 2019 Absolute TSReach participating NEO as well as the final quarterly bonus payments earned. Mr. Dibowitz was not an employee of the Company during this period and did not participate in the 2021 quarterly VCIP program.
| Name | Q1 2021 VCIP Target ($) | Q1 2021 VCIP Payout ($) | Q2 2021 VCIP Target ($) | Q2 2021 VCIP Payout ($) | ||||||||||||||||||||||
| Darin Gibbins | 68,652 | 102,978 | 68,652 | 75,517 | ||||||||||||||||||||||
| Gilles Luca | 289,687 | 434,531 | 289,687 | 318,657 | ||||||||||||||||||||||
| Thomas P. Burke | 983,250 | 1,474,875 | 983,250 | 1,081,575 | ||||||||||||||||||||||
| Jonathan Baksht | 348,125 | 522,188 | 348,125 | 382,937 | ||||||||||||||||||||||
| Alan Quintero | 232,000 | 348,000 | 232,000 | 255,200 | ||||||||||||||||||||||
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Second Half 2021 Program
In June 2021, the Compensation Committee approved a cash incentive program covering the performance unitperiod from 1 July through 31 December 2021. Each executive’s award opportunity could be earned from 0% to 200% based on achievement of the following performance goals:
•personal safety (weighted 15%);
•process safety (weighted 15%);
•downtime (weighted 15%);
•backlog addition (weighted 25%); and
•EBITDAR (weighted 30%).
The Company established the below performance targets and achieved the following results with respect to each of these metrics ($ amounts shown in millions):
| Performance Metric | Threshold | Target | Maximum | Actual | Payout % | |||||||||||||||||||||||||||
Personal safety(1) | 1.100 | 0.900 | 0.750 | 1.069 | 9% | |||||||||||||||||||||||||||
Process safety(2) | 0.150 | 0.100 | 0.050 | 0.408 | 0% | |||||||||||||||||||||||||||
Downtime(3) | ||||||||||||||||||||||||||||||||
| Jackup downtime | 2.20% | 1.70% | 1.40% | 1.37% | 22% | |||||||||||||||||||||||||||
| Floater downtime | 4.00% | 3.00% | 2.50% | 4.34% | 0% | |||||||||||||||||||||||||||
Backlog Addition (# of days)(4) | 8,416 | 10,606 | 13,891 | 18,814 | 50% | |||||||||||||||||||||||||||
EBITDAR(5) | $39.8 | $59.8 | $79.8 | $89.1 | 60% | |||||||||||||||||||||||||||
| Final Earned Payout | 141% of target | |||||||||||||||||||||||||||||||
(1)Personal safety is determined based on the Company’s recordable severity rate over the 6-month period ended 31 December 2021.
(2)Process safety is determined based on the Company’s process safety rate over the 6-month period ended 31 December 2021.
(3)Downtime is based on both jackup and floater downtime with the weighting between the two based on the active rig ratio calculated at the end of the 6-month performance period.
(4)Backlog addition is calculated based on the number of firm contract days signed in 2021.
(5)EBITDAR is calculated as earnings before interest, taxes, depreciation, amortization and reactivation costs.
Set forth below are the target second half VCIP award opportunities for each participating NEO as well as the final second half bonus payments earned.
| Name | 2H 2021 VCIP Target ($) | 2H 2021 VCIP Payout ($) | ||||||
| Anton Dibowitz | 306,685(1) | 432,426 | ||||||
| Darin Gibbins | 83,315(1) | 117,474 | ||||||
| Gilles Luca | 223,125 | 314,606 | ||||||
| Thomas P. Burke | 196,789(1) | 277,473 | ||||||
| Jonathan Baksht | 233,750 | 329,588 | ||||||
| Alan Quintero | 184,000 | 259,440 | ||||||
(1)The 2H 2021 VCIP targets for Messrs. Dibowitz, Gibbins and Burke are their respective pro-rated targets based on their salary amounts earned and period of employment in the relevant role.
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2021 Long-Term Incentive Awards
Other than Mr. Dibowitz, who joined the Company in July 2021, each of the NEOs forfeited all outstanding equity awards in connection with our emergence from bankruptcy in April 2021. In consultation with its independent compensation consultant, Lyons, Benenson & Company Inc. ("LB&Co."), in July 2021 the Compensation Committee approved (and with respect to Mr. Burke, recommended that the independent members of the Board approve) emergence equity awards under our 2021 Management Incentive Plan (the “MIP”) for each of Messrs. Gibbins, Burke, Baksht, Luca and Quintero.
Messrs. Burke, Baksht and Quintero were each granted awards under the MIP, which were forfeited upon their respective separations from the Company such that these executives never realized any value from the grants. However, in accordance with SEC disclosure requirements, the full grant date value of such awards is reflected in the “Share Awards” column of the Summary Compensation Table above.
With respect to Messrs. Luca, Burke, Baksht and Quintero, 20% of the emergence equity award was granted in July 2021 in the form of time-based RSUs that vest ratably in three annual installments. The settlement of all vested RSUs, however, will be deferred until July 2024 to further align executive and shareholder interests.
These RSUs are subject to full acceleration in the event of a change in control and pro-rata vesting in the event of a termination without cause, resignation for specific good reason events, retirement that occurs at least 12 months following the date of grant, death or disability. Even if an event occurs that waives the continued service vesting requirement, settlement of the RSUs is not accelerated, except in the case of a change in control, retirement or death. The award agreements for such grants include standard confidentiality, non-compete, non-solicit and non-disparagement covenants.
Mr. Gibbins was not an executive officer in July 2021 when the Compensation Committee approved the emergence grants. As a result, he participated in our non-executive officer long-term incentive program and received his 2021 MIP award entirely in the form of time-based RSUs that vest and settle ratably in three equal annual installments. Mr. Gibbins’ RSUs are otherwise subject to similar terms and conditions as the other NEOs’ RSUs, except that his RSUs do not provide for any acceleration upon a resignation for good reason and do not include a requirement that any retirement occur at least 12 months after the grant date.
The remaining 80% of Messrs. Burke, Baksht, Luca and Quintero’s 2021 MIP awards were granted in the form of PSUs that vest based on the attainment of share price (70%), Relative ROCE (20%) and strategic performance objectives (10%) over a performance period from 1 July 2021 through 30 June 2024 as follows:
| Share Price PSUs (70% of award) | 50% - Valaris common shares achieve closing price of | 100% - Valaris common shares achieve closing price of | 150% - Valaris Common Shares achieve closing price of | |||||||
42
(20% of award) | •Transocean Ltd. •Noble Corporation •Borr Drilling Limited •Shelf Drilling Ltd. •Diamond Offshore Drilling, Inc. •Odfjell Drilling Ltd. •Patterson-UTI Energy, Inc. •Helmerich & Payne, Inc. | ||||
(10% of award) | |||||
In December 2021, in connection with his appointment as President and Chief Executive Officer, and to align his equity incentives with our other members of executive management, Mr. Dibowitz was granted an award of time-based RSUs that vests in three equal annual installments on 19 July 2022, 19 July 2023 and 19 July 2024, with settlement of all such RSUs deferred until after the final vesting date, and an award of PSUs that may be earned up to 150% of the target award based on the same performance criteria as outlined above. Settlement of his PSUs will occur following the completion of the performance period in July 2024. All of the 2021 PSUs will vest upon a change in control, to the extent earned, based on achievement of the applicable performance objectives through such change in control event. In addition, a pro-rata portion of the PSUs will remain outstanding and eligible to vest based on actual performance over the full performance period in the event of a termination without cause, resignation for certain good reason events, retirement that occurs at least 12 months following the date of grant, death or disability. The award agreements for such grants include standard confidentiality, non-compete, non-solicit and non-disparagement covenants. For information on the total number of RSUs and PSUs granted to each NEO during 2021, see footnote 4 to the Summary Compensation Table above. Hedging Policy We have a Securities Trading Policy that specifically prohibits directors, NEOs and certain other employees from (a) engaging in short-sales of the Company's shares, (b) engaging in any hedging transactions of any kind related to our securities and (c) purchasing shares through a margin account. Due to the difficulty in monitoring compliance with a company-wide hedging prohibition and the relatively smaller share holdings of our employees generally, we do not prohibit hedging transactions by other employees that are not subject to the anti-hedging provisions of our Securities Trading Policy. 43 |
Outstanding Equity Awards at Fiscal Year-End Table
The following table sets forth information regarding the number and amount of restricted shares, restricted unitsoutstanding RSU and performance unitPSU awards that had not been earned or vestedfor Messrs. Dibowitz, Gibbins and Luca as of 31 December 2019.2021. Messrs. Burke, Baksht and Quintero had no awards outstanding as of 31 December 2021.
Outstanding Equity Awards at Fiscal Year-End Table
For the Year Ended 31 December 2021
| Share Awards | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Name | Grant Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) (1) | Equity Incentive Plan Awards: Unearned Shares, Units or Other Rights That Have Not Vested (#) (2) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(1) | ||||||||||||||||||||||||||||||||||||||||||||||||
| Anton Dibowitz | 7/1/2021 | 5,504 | (3) | 198,144 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| 7/1/2021 | 12,930 | (4) | 465,480 | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| 12/8/2021 | 103,304 | (5) | 3,718,944 | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| 12/8/2021 | — | — | 170,433 | (7) | 6,135,588 | (7) | |||||||||||||||||||||||||||||||||||||||||||||||
| 12/8/2021 | — | — | 97,390 | (8) | 3,506,040 | (8) | |||||||||||||||||||||||||||||||||||||||||||||||
| 12/8/2021 | — | — | 16,232 | (8) | 584,352 | (8) | |||||||||||||||||||||||||||||||||||||||||||||||
| Darin Gibbins | 7/19/2021 | 14,799 | (6) | 532,764 | N/A | N/A | |||||||||||||||||||||||||||||||||||||||||||||||
| Gilles Luca | 7/19/2021 | 41,403 | (5) | 1,490,508 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| 7/19/2021 | — | — | 57,963 | (7) | 2,086,668 | (7) | |||||||||||||||||||||||||||||||||||||||||||||||
| 7/19/2021 | — | — | 33,122 | (8) | 1,192,392 | (8) | |||||||||||||||||||||||||||||||||||||||||||||||
| 7/19/2021 | — | — | 5,520 | (8) | 198,720 | (8) | |||||||||||||||||||||||||||||||||||||||||||||||
(1)2019Value is based on the closing price of our common shares on 31 December 2021 of $36.00.
| Options/ SAR Awards | Share Awards | Equity Incentive Plan Awards | |||||||||||||||||||||
| Name | Securities Underlying Unexercisable Options/ SARs (#) | Option/ SARs Exercise Price ($) | Option/ SARs Expiration Date | Year Granted | Shares That Have Not Vested (#) | Market Value of Shares That Have Not Vested ($) | Unearned Shares, Units or Other Rights That Have Not Vested (#)(1) | Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(2)(3) | |||||||||||||||
| Thomas P. Burke | 244,025 | 25.58 | 2/22/2024 | 2019 | 277,217 | (4) | 1,818,544 | N/A | N/A | ||||||||||||||
| 18,385 | 61.40 | 2/25/2021 | 2018 | 79,591 | (4) | 522,117 | — | — | |||||||||||||||
| 21,594 | 51.60 | 3/07/2022 | 2017 | 218,935 | (4) | 1,436,214 | — | — | |||||||||||||||
| 32,078 | 49.97 | 3/06/2023 | — | — | — | — | — | ||||||||||||||||
| Carl G. Trowell | — | — | — | 2019 | — | (5) | — | — | — | ||||||||||||||
| — | — | — | 2018 | 89,222 | (5) | 585,296 | — | — | |||||||||||||||
| — | — | — | 2017 | 21,634 | (5) | 141,919 | — | — | |||||||||||||||
| Jonathan Baksht | — | — | — | 2019 | 39,988 | (6) | 262,321 | — | 675,000 | ||||||||||||||
| — | — | — | 2018 | 24,090 | (6) | 158,030 | — | 337,500 | |||||||||||||||
| — | — | — | 2017 | 5,841 | (6) | 38,317 | — | — | |||||||||||||||
| — | — | — | 2015 | 1,052 | (6) | 6,901 | N/A | N/A | |||||||||||||||
| Gilles Luca | — | — | — | 2019 | 39,988 | (7) | 262,321 | — | 675,000 | ||||||||||||||
| — | — | — | 2018 | 24,090 | (7) | 158,030 | — | 337,500 | |||||||||||||||
| — | — | — | 2017 | 5,841 | (7) | 38,317 | — | — | |||||||||||||||
| Alan Quintero | — | — | — | 2019 | 144,734 | (8) | 949,455 | N/A | N/A | ||||||||||||||
| Michael T. McGuinty | — | — | — | 2019 | 35,545 | (9) | 233,175 | — | 600,000 | ||||||||||||||
| — | — | — | 2018 | 21,413 | (9) | 140,469 | — | 300,000 | |||||||||||||||
| — | — | — | 2017 | 5,192 | (9) | 34,060 | — | — | |||||||||||||||
| P. Carey Lowe | — | — | — | 2019 | — | (10) | — | — | — | ||||||||||||||
| — | — | — | 2018 | — | (10) | — | — | — | |||||||||||||||
| — | — | — | 2017 | — | (10) | — | — | — | |||||||||||||||
| John S. Knowlton | — | — | — | 2019 | — | (11) | — | — | 50,000 | ||||||||||||||
| — | — | — | 2018 | — | (11) | — | — | 300,000 | |||||||||||||||
| — | — | — | 2017 | — | (11) | — | — | 300,000 | |||||||||||||||
(2)The PSUs granted in 2021 are included in this column. These awards vest and are payable from 0% to 150% of the Rowan Transaction, Mr. Knowlton's 2017target units granted in equity following a three-year performance period and 2018subject to attainment of the applicable performance awards fullyobjectives.
(3)Annual director award that is scheduled to vest on 1 July 2022, the first anniversary of the date of grant, or the Company’s next annual shareholder’s meeting, whichever occurs first.
(4)Emergence director award that is scheduled to vest in three annual installments on 15 June 2022, 2023 and 2024.
(5)Award that is scheduled to vest in three annual installments on 19 July 2022, 2023 and 2024, with settlement of all vested units deferred until after 19 July 2024.
(6)Award that is scheduled to vest in three annual installments on 19 July 2022, 2023 and 2024.
(7)Unearned Share Price PSUs reflect the number of units calculated at the targetthreshold level. Awards vest and the 2019 awards accelerated on a pro-rata basis (accordingare payable in equity at 0% to the portion150% of the target number of units granted following a three-year performance period he was employed). See "Summary Compensation Table" for further details.
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| Share Awards | |||||
| Name | Shares Acquired on Vesting (#) | Value Realised on Vesting ($) | |||
| Carl G. Trowell | 85,306 | 1,461,379 | |||
| Jonathan Baksht | 24,246 | 398,978 | |||
| Gilles Luca | 23,555 | 398,948 | |||
| Michael T. McGuinty | 25,189 | 430,330 | |||
| P. Carey Lowe | 38,546 | 639,937 | |||
| John S. Knowlton | 50,041 | 696,970 | |||
| Plan Name | Number of Years of Credited Service(#) | Present Value of Accumulated Benefit($)(a) | Payments During Last Fiscal Year($) | ||||
| Thomas P. Burke | Rowan Pension Plan | 7 | 113,341 | — | |||
| Rowan SERP | 9 | 1,216,993 | — | ||||
| Alan Quintero | Rowan Pension Plan | — | — | — | |||
| Rowan SERP | 2 | 24,191 | — | ||||
| Plan Name | Age at December 31, 2019 | Frozen Plan Benefit Monthly annuity - starting at age 60 ($) | Frozen Plan Benefit Monthly Annuity - January 1, 2020 Commencement | Cash Balance Lump Sum - Age 60 Commencement | Cash Balance Lump Sum - January 1, 2020 Commencement | ||||||||||||
| Thomas P. Burke | Rowan Pension Plan | 52.27 | — | N/A | $ | 144,259 | $ | 115,366 | |||||||||
| Rowan SERP | 52.27 | — | N/A | $ | 1,533,945 | $ | 1,226,720 | ||||||||||
| Alan Quintero | Rowan Pension Plan | 56.84 | — | N/A | $ | — | $ | — | |||||||||
| Rowan SERP | 56.84 | — | N/A | $ | 26,594 | $ | 24,972 | ||||||||||
| Name | Executive Contributions ($)(1) | Registrant Contributions ($)(2) | Aggregate Earnings ($)(3) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at FYE ($) | ||||||||||
| Thomas P. Burke | 23,750 | 23,750 | 2,648 | — | 50,148 | ||||||||||
| Jonathan Baksht | 14,104 | 14,104 | 19,598 | — | 116,386 | ||||||||||
| Gilles Luca | 13,969 | 25,375 | 96,336 | — | 437,783 | ||||||||||
| P. Carey Lowe | 17,000 | 17,000 | 420,899 | — | 2,661,052 | ||||||||||
John S. Knowlton(4) | 938 | 938 | 96,379 | (482,841 | ) | 476,937 | |||||||||
Pursuant to the Dibowitz Employment Agreement, if Mr. Dibowitz is terminated without Cause or resigns for Good Reason (each as defined in the Dibowitz Employment Agreement), subject to execution of a customary release, Mr. Dibowitz would be entitled to: (a) a severance payment equal to two times the sum of his base salary and benefits that would have become be payable to our NEOs (other than Messrs. Lowe and Knowlton) upontarget annual bonus, (b) a varietypro-rated target annual bonus for the year of termination, or change(c) 18 months of subsidized health continuation coverage, (d) up to 12 months of outplacement services and (e) reimbursement of certain legal fees incurred in control scenarios hadconnection with negotiation of such occurred as of 31 December 2019. Following this date, our Board adoptedrelease. The Dibowitz Employment Agreement also includes customary confidentiality, non-competition, non-solicitation, non-disparagement and invention assignment covenants.
Executive Severance Plan
Mr. Luca participates in the Valaris Executive Severance Plan, which currently provideswas amended and restated as of 30 April 2021. Pursuant to the Executive Severance Plan, if terminated by Valaris without Cause or by him for Good Reason (each as defined in the Executive Severance Plan), subject to execution of a customary release, Mr. Luca would be entitled to (a) a severance paymentspayment equal to one times the sum of his base salary and benefits described under “Executive Severance Plan” abovetarget annual bonus, (b) a target bonus for the performance period in which termination occurs, (c) 12 months of subsidized health continuation coverage, (d) subject to any overriding terms in any grant agreement (including the 2021 award agreements), accelerated vesting of time-based incentive awards and pro-rated accelerated vesting of performance-based incentive awards based on actual results realized over the performance period, (e) up to 12 months of outplacement services and (f) reimbursement of certain legal fees incurred in connection with negotiation of such release. Vesting of the RSUs and PSUs granted in 2021 upon a change of control, a termination without cause, a resignation for good reason or a qualifying NEO termination.retirement is described under “2021 Long-Term Incentive Awards” above.
In light of his interim role, Mr. Gibbins continues to participate in the Valaris Non-Executive Employee Severance Plan (the “Non-Executive Severance Plan”). Pursuant to the Non-Executive Severance Plan, upon his termination by Valaris without Cause (as defined in the Non-Executive Severance Plan), Mr. Gibbins would be entitled to (a) a descriptionseverance payment equal to six months of base salary, (b) a pro-rated target bonus for the actualperformance period in which termination occurs based on days employed during such performance period, (c) up to six months of subsidized health continuation coverage and (d) six months of outplacement assistance.
Messrs. Burke, Baksht and Quintero’s Separation Agreements
Each of Messrs. Burke, Baksht and Quintero received severance payments and benefits provided to Messrs. Lowe and Knowlton in connection with their respective departures, see "Mr. Lowe'sseparation of employment as described further above under “Narrative Disclosures to Summary Compensation Table—Mr. Burke’s Separation, Mr. Baksht’s Separation and Consulting Agreements" and "Mr. Knowlton's Separation Agreement" above.
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| Lump-sum cash payment | Covered Medical Coverage(2) | Outplacement Services | Full Acceleration of Outstanding Equity Awards(3) | Total | |||||||||||||||||||
| Base Salary as of 31 December 2019 | Target ECIP(1) | Pro-rated 2019 ECIP | |||||||||||||||||||||
| $ | 950,000 | $ | 1,045,000 | ||||||||||||||||||||
| x 2.99 | x 2.99 | ||||||||||||||||||||||
| $ | 2,840,500 | $ | 3,124,550 | $ | 882,367 | $ | 56,402 | $ | 25,000 | $ | 3,776,875 | $ | 10,705,694 | ||||||||||
| Cash Severance Payment | 2019 ECIP | Base Salary though 18-month Term | Continued Medical Coverage(1) | Full acceleration of outstanding awards(2) | Total | ||||||||||||
| £ | 5,000,000 | £ | 628,260 | £ | 349,180 | ||||||||||||
| X 1.277 | X 1.277 | X 1.277 | |||||||||||||||
| $ | 6,385,000 | $ | 802,288 | $ | 445,903 | $ | 2,584 | $ | 727,215 | $ | 8,362,990 | ||||||
Restricted Shares | Performance Unit Awards(1) | Total | |||||||||
| Jonathan Baksht | $ | 465,569 | $ | 2,025,000 | $ | 2,490,569 | |||||
Gilles Luca(2) | $ | 458,668 | $ | 2,025,000 | $ | 2,483,668 | |||||
| Alan Quintero | $ | 949,455 | $ | — | $ | 949,455 | |||||
| Michael T. McGuinty | $ | 407,704 | $ | 1,800,000 | $ | 2,207,704 | |||||
| Lump Sum Payment | ||||||||||||||||
| Name | Base Salary | ECIP | Health Benefits | Total | ||||||||||||
| Jonathan Baksht | $ | 1,100,000 | $ | 885,770 | $ | 29,158 | $ | 2,014,928 | ||||||||
Gilles Luca(1) | $ | 525,000 | $ | 367,326 | $ | 14,448 | $ | 906,774 | ||||||||
| Alan Quintero | $ | 415,000 | $ | 257,922 | $ | 15,484 | $ | 688,406 | ||||||||
| Michael T. McGuinty | $ | 510,000 | $ | 381,110 | $ | 2,182 | $ | 893,292 | ||||||||
For 2019,2021, the Compensation Committee used a combination of retainer fees and equity compensation to attract and retain qualified candidates to serve on the Board. Our Compensation Committee periodically reviews non-executive director compensation, which includes review of data received from FW Cookthird party compensation consultants and, from time to time, recommends changes to the Board. LB&Co. was engaged in 2021 to review non-executive director compensation. Following the review of this information, in 2019, our Board implemented a director compensation program consisting of a cash-based retainer fee paid quarterly and an annualequity-based retainer for the Independent Lead Director and the Finance Committee Chair of $25,000 and $15,000, respectively; changed the vesting period non-executive director equity awardsawarded annually. Additionally, upon our emergence from three years to one year; and allowed thebankruptcy, our current non-executive directors to elect to defer their annual equity awards.received a one-time grant of RSUs. Total non-executive director compensation generally is intended to approximate the median of our compensation peer group companies.
Annual Retainer Fees
The compensation of our current non-executive directors for the 2019-2020 service year wasis composed of an annual cash retainer of $100,000.$100,000, or $180,000 in the case of the Chair of the Board. Additional annual retainers were paid as follows: Independent Lead Director $25,000;Audit Committee Chair $35,000; Strategy Committee Chair $15,000; Compensation Committee Chair $15,000; N&G Committee Chair $15,000; and ESG Committee Chair $15,000. In addition, non-executive directors, except the current Chair of the Board, serving on two or more committees but not chairing any committee receive an additional annual retainer of $10,000. All retainer fees are paid quarterly in advance and are pro-rated for a partial service period.
The compensation of former non-executive directors who served during the 2021 service year consisted entirely of cash with an annual retainer of $300,000. Additional annual retainers were paid as follows: Audit Committee Chair $20,000; Compensation Committee Chair $15,000; Finance Committee Chair $15,000$15,000; Special Committee and NGSNominating, Governance and Sustainability Committee Chair $10,000.$10,000 and Non-Executive Chairman $75,000. All retainer fees arewere paid quarterly in advance and are proratedwere pro-rated for a partial quarter of service as a director, Independent Lead Director or Committee Chair.period.
Equity Compensation
Equity accumulation by our non-executive directors is encouraged, and we have share ownership guidelines, which are included in the Corporate Governance Policy. The guidelines require that each non-executive director, within five years of appointment to the Board, hold a number of vested and unvested shares of the Company having a value of at least five times the annual retainer. Each director was in compliance with these guidelines at the end of 2019.2021.
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Mr. Dibowitz, a non-executive director for the period 1 July 2021 to 2 September 2021, received a $25,000 retainer fee, $3,750 for his role as the Strategy Committee Chair and $2,500 for his role on two other Board committees, as well as 18,434 RSUs with grant date fair value of $546,384. These amounts are included in the Summary Compensation table above in the "all other compensation column" and "share awards column", respectively. Mr. Dibowitz did not receive any additional cash compensation for his service as a director after his employment by the Company on 3 September 2021.
Mr. Burke, and Trowell, ouran executive directors,director for the period 1 January 2021 to 2 September 2021, did not receive any additional compensation for their services as a directordirector. Mr. Burke received $43,269 for his service as a board member of ARO. This amount is included in 2019.
the "All Other Compensation" column.
The compensation paid to non-executive directors that served on our Board in 20192021 is reported in the Director Compensation Table as follows:
Director Compensation Table
For the Year Ended 31 December 20192021
| Name | Fees Earned or Paid in Cash ($) | Share Awards ($)(1) | All Other Compensation ($)(2) | Total ($) | ||||||||||||||||||||||||||||||||||
Current Directors: (3) | ||||||||||||||||||||||||||||||||||||||
| Elizabeth D. Leykum | 165,500 | 769,267 | — | 934,767 | ||||||||||||||||||||||||||||||||||
| Dick Fagerstal | 124,125 | 606,073 | — | 730,198 | ||||||||||||||||||||||||||||||||||
| Joseph Goldschmid | 114,931 | 606,073 | — | 721,004 | ||||||||||||||||||||||||||||||||||
| Deepak Munganahalli | 105,736 | 606,073 | — | 711,809 | ||||||||||||||||||||||||||||||||||
| James W. Swent, III | 114,931 | 606,073 | — | 721,004 | ||||||||||||||||||||||||||||||||||
Former Directors: (4) | ||||||||||||||||||||||||||||||||||||||
| Paul E. Rowsey, III | 159,712 | — | — | 159,712 | ||||||||||||||||||||||||||||||||||
| Charles L. Szews | 83,750 | — | 2,193 | 85,943 | ||||||||||||||||||||||||||||||||||
| Suzanne P. Nimocks | 77,810 | — | 2,306 | 80,116 | ||||||||||||||||||||||||||||||||||
| William E. Albrecht | 75,000 | — | 113 | 75,113 | ||||||||||||||||||||||||||||||||||
| Fredrick Arnold | 75,000 | — | 2,193 | 77,193 | ||||||||||||||||||||||||||||||||||
| Mary E. Francis CBE | 75,000 | — | 307 | 75,307 | ||||||||||||||||||||||||||||||||||
| Georges J. Lambert | 75,000 | — | — | 75,000 | ||||||||||||||||||||||||||||||||||
| Thierry Pilenko | 75,000 | — | — | 75,000 | ||||||||||||||||||||||||||||||||||
(1)The amounts disclosed in this column represent the aggregate grant date fair value of RSUs awarded as annual equity and emergence grants to current directors during 2021. Grant date fair value for RSUs is measured using the closing price of our common shares on the grant date as described in Note 12 to our 31 December 2021 audited consolidated financial statements included in our annual report on Form 10-K filed with the SEC on 22 February 2022.
Ms. Leykum, received an annual non-executive director equity award of 8,894 shares with a grant date fair value of $244,763 and an emergence equity award of 19,059 shares with a grant date fair value of $524,504 as Chair of the Board. Messrs. Fagerstal, Swent, Goldschmid and Munganahalli received an annual non-executive director equity award of 7,200 shares with a grant date fair value of $198,144 and an emergence equity award of 14,823 shares with a grant date fair value of $407,929. The annual equity awards vest in full on the earlier of the first anniversary of the grant date or the next annual meeting of shareholders following the grant. The emergence equity awards vest ratably in equal installments over a three year period from the date of grant.
(2)Amounts disclosed represent payments made by the Company on behalf of the directors during 2021 for contributions to group health and welfare insurance.
(3)Ms. Leykum and Messrs. Fagerstal, Goldschmid, Munganahalli and Swent were appointed upon our emergence from bankruptcy on 30 April 2021.
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| Name | Fees Earned or Paid in Cash ($) | Dividends on Share Awards ($)(1) | Share Awards ($)(2) | Non-Equity Incentive Plan Compensation ($) | All Other Compensation ($)(4) | Total ($) | ||||||||||||
| William E. Albrecht | 114,583 | — | 200,009 | — | 522 | 315,114 | ||||||||||||
| Fredrick Arnold | 34,783 | — | 103,826 | — | 2,200 | 140,809 | ||||||||||||
| Mary E. Francis CBE | 100,000 | 584 | 200,009 | — | 1,255 | 301,848 | ||||||||||||
| Georges J. Lambert | 38,587 | — | 111,477 | — | — | 150,064 | ||||||||||||
| Suzanne P. Nimocks | 105,417 | — | 200,009 | — | 8,593 | 314,019 | ||||||||||||
| Thierry Pilenko | 91,667 | — | 200,009 | — | — | 291,676 | ||||||||||||
| Keith O. Rattie | 120,000 | 584 | 200,009 | — | 9,552 | 330,145 | ||||||||||||
| Paul E. Rowsey, III | 112,747 | 803 | 200,009 | — | 10,418 | 323,977 | ||||||||||||
| Charles L. Szews | 97,455 | — | 200,009 | — | 12,754 | 310,218 | ||||||||||||
J. Roderick Clark(3) | 75,412 | 584 | 200,009 | — | 7,246 | 283,251 | ||||||||||||
Roxanne J. Decyk(3) | 2,747 | 584 | — | — | 805 | 4,136 | ||||||||||||
C. Christopher Gaut(3) | 75,000 | 584 | 200,009 | — | — | 275,593 | ||||||||||||
Jack E. Golden(3) | 2,747 | 553 | — | — | — | 3,300 | ||||||||||||
Gerald W. Haddock(3) | 2,747 | 584 | — | — | 805 | 4,136 | ||||||||||||
Francis S. Kalman(3) | 2,747 | 584 | — | — | 805 | 4,136 | ||||||||||||
Phil D. Wedemeyer(3) | 2,747 | 463 | — | — | — | 3,210 | ||||||||||||
As of 31 December 2019,2021, the total number of share and unit awards held by each current non-executive director was as follows:
| Name | Number of Non-Deferred RSUs Held | Number of Deferred RSUs Held | |||||||||
| Elizabeth D. Leykum | 27,953 | — | |||||||||
| Dick Fagerstal | 7,200 | 14,823 | |||||||||
| Joseph Goldschmid | — | 22,023 | |||||||||
| Deepak Munganahalli | 22,023 | — | |||||||||
| James W. Swent, III | — | 22,023 | |||||||||
| Name | Number of Non-Deferred RSUs Held | Number of Deferred RSUs Held | |||
| William E. Albrecht | — | 35,492 | |||
| Fredrick Arnold | 23,437 | — | |||
| Mary E. Francis CBE | 30,509 | — | |||
| Georges J. Lambert | 25,164 | — | |||
| Suzanne P. Nimocks | 22,806 | 30,085 | |||
| Thierry Pilenko | — | 42,186 | |||
| Keith O. Rattie | 30,509 | — | |||
| Paul E. Rowsey, III | 33,398 | — | |||
| Charles L. Szews | 22,806 | 6,076 | |||
No stock options were granted to our directors during 2019, and there were no stock options held by any of our non-executive directors as of 31 December 2019.
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| Plan category | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))(1) | ||||||||
| (a) | (b)(1) | (c) | |||||||||
| Equity compensation plans approved by security holders | — | $ | — | 2,471,736 | |||||||
Equity compensation plans not approved by security holders(2) | 906,624 | 51.56 | 2,425,751 | ||||||||
| Total | 906,624 | $ | 51.56 | 4,897,487 | |||||||
HOUSEHOLDING OF SHAREHOLDER MATERIALS
We participate, and some brokers, banks and other nominee record holders may be participating, in the practice of householding proxy materials, which means that we and any participating brokers, banks and other nominee record holders will deliver only one Notice of Internet Availability of Proxy Materials and proxy materials to multiple shareholders sharing an address unless we have, or such broker, bank, trust or other nominee record holder has, received contrary instructions from one or more shareholders at such address. This procedure allows multiple shareholders residing at the same address the convenience of receiving a single Notice of Internet Availability of Proxy Materials or set of proxy materials. Upon request, we will promptly deliver a separate copy of the Notice of Internet Availability of Proxy Materials or proxy materials to any shareholder at a shared address to which a single copy of such documents was delivered. You may request a separate copy of the Notice of Internet Availability of Proxy Materials or proxy materials and request that you receive a single copy or multiple copies in the future by calling 1-800-579-1639 or e-mailing sendmaterial@proxyvote.com. You also may request paper copies when prompted after you vote at www.proxyvote.com.
IMPORTANT NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL GENERAL MEETING OF SHAREHOLDERS TO BE HELD ON
We provide shareholders access to the proxy materials for the Meeting over the Internet as permitted under applicable SEC rules. We believe the rules enable us to provide shareholders the information they need in a more timely manner, while lowering the costs of printing and delivering the proxy materials.
To access and review the proxy materials for the Meeting, go to www.proxyvote.com and follow the instructions on the website.
We encourage you to accessare monitoring developments regarding the ongoing COVID-19 pandemic and review all information containedpreparing in the proxy materials before voting. Please note that in light of UK Government measures relatingevent any modifications to our Annual General Meeting are necessary or appropriate.If we determine to make any change to the ongoing outbreakdate, time or procedure of COVID-19, subject to any further announcement by - or shareholder communication from - the Company, this year’sour Annual General Meeting, we will be run as a closed meeting and shareholders will not be able to attendannounce such changes in person.advance on our website www.valaris.com.
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INFORMATION CONCERNING SHAREHOLDER PROPOSALS FOR THE
Any of our shareholders intending to present a proposal at the 20212023 Annual General Meeting of Shareholders must deliver such proposal to our principal executive office, in writing and in accordance with SEC Rule 14a-8, no later than 6 January 202120 December 2022 for inclusion in the proxy statement related to that meeting. The proposal should be delivered to our secretaryCompany Secretary by certified mail, return receipt requested.
In addition, apart from the SEC Rule 14a-8 process described above, a shareholder whose nomination of a person for appointment to the Board or proposal of business is not included in the proxy statement related to the 20212023 Annual General Meeting of Shareholders, but who still intends to submit a nomination or proposal at that meeting, is required by our Articles of Association,bye-laws, and subject to any other requirements of law, to deliver a timely notice for such nomination or proposal, in proper form, in writing. To be timely, such notice must be delivered to or mailed and received by our secretaryCompany Secretary at our principal executive offices, not earlier than the close of business on the 75th day and not later than the close of business on the 50th day prior to the first anniversary of the preceding year's Annual General Meeting of Shareholders, subject to any other requirements of law; provided, however, that in the event that the date of the Annual General Meeting of Shareholders is more than 30 days before or more than 60 days after such anniversary date, notice by the shareholder to be timely must be so delivered not earlier than the close of business on the 75th day prior to the date of such Annual General Meeting of Shareholders and not later than the close of business on the later of the 50th day prior to the date of such Annual General Meeting of Shareholders or, if the first public announcement of the date of such Annual General Meeting of Shareholders is less than 65 days prior to the date of such Annual General Meeting of Shareholders, the 15th day following the day on which public announcement of the date of such meeting is first made. In the case of the 20212023 Annual General Meeting of Shareholders, references to the anniversary date of the preceding year's Annual General Meeting of Shareholders shall mean the first anniversary of 158 June 2020.2022. In addition to giving notice pursuant to the advance notice provisions of the Company's bye-laws, a shareholder who intends to solicit proxies in support of nominees submitted under these advance notice provisions must also provide the notice required under Rule 14a-19, the SEC's universal proxy rule, to the Company Secretary regarding such intent no later than 9 April 2023.
Any such proposal must also comply with the other provisions contained in our Articles of Associationbye-laws relating to shareholder proposals, including provision of certain information specified in our Articles of Association,bye-laws, such as information concerning the nominee of the proposal, if any, and the shareholder and the beneficial owner, as the case may be. Any proposed nomination or business that does not meet the requirements set forth in our Articles of Association,bye-laws, other than proposals submitted in compliance with SEC Rule 14a-8 under the Exchange Act, may be declared out of order and may not be considered at the 20212023 Annual General Meeting of Shareholders.
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If a shareholder wishes to votepresent a proposal at the 2023 Annual General Meeting of Shareholders in accordance with our bye-laws, or to nominate a person for election as a director, the shareholder, and who hold sharesthe proposal must comply with the requirements set forth in our bye-laws, including by the shareholder giving timely notice of the proposal in writing to the Company on which there has been paid up an average sum, per shareholder, ofSecretary at least £100 can require the Company5847 San Felipe, Suite 3300, Houston, TX 77057. In order to give shareholdersbe timely under our bye-laws, notice of a resolution which may be and is intended to be moved at the Annual General Meeting of Shareholders unless (a) the resolution would, if passed, be ineffective (whether by reason of inconsistency with any enactment or the company's constitution or otherwise); (b) it is defamatory of any person; or (c) it is frivolous or vexatious. Such a request, made by the requisite number of shareholders,shareholder proposals must be received by the Company Secretary, not less than 90 days nor more than 120 days before the anniversary of the 2022 Annual General Meeting; however, in the event that annual general meeting is called for a date that is not more than 30 days before or more than 60 days after such anniversary, notice by the shareholder in order to be timely must be received not later than six weeks before10 days following the earlier of the date on which notice of the 2023 Annual General Meeting was posted to shareholders or the date on which public disclosure of Shareholders.the date of the 2023 Annual General Meeting was made. As a result, any notice given by or on behalf of a shareholder for the nomination of persons for election to the Board or present a proposal pursuant to the Company’s bye-laws (and not pursuant to SEC Rule 14a-8) must be received no earlier than 8 February 2023 and no later than 10 March 2023. All director nominations and shareholder proposals must comply with the requirements of the Company’s bye-laws.
The Chair of the meeting may refuse to allow the transaction of any business not proposed in compliance with our bye-laws.
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OTHER MATTERS
The Company has not been notified of, and our Board is not aware of, any other matters to be presented for action at the Meeting.
The following materials are being distributed to shareholders with this proxy statement: the letter to shareholders from our President and Chief Executive Officer and our 20192021 annual report to shareholders, which includes our consolidated financial statements for the year ended 31 December 20192021 filed in our annual report on Form 10-K with the SEC and also includes our U.K. statutory accounts and reports of the directors and auditors of Valaris.SEC.
Upon request in writing, we will provide each person solicited by this proxy statement, without charge except for exhibits, a copy of our annual report on Form 10-K for the year ended 31 December 20192021 as filed with the SEC, including the financial statements and financial statement schedules.statements. Please direct your request to our Investor Relations Department, 5847 San Felipe, Suite 3300, Houston, Texas 77057.
In light of current UK government restrictions on public gatherings,the ongoing COVID-19 pandemic, we urge you to vote your shares by proxy.
FORWARD-LOOKING STATEMENTS
Company goals are aspirational and may change. Statements regarding the market where we primarily compete for executive talentCompany’s goals are not guarantees or promises that they will be met. Content available at websites and that the characteristics of our programmes listed above are consistent with "best practices" in compensation governance for other companies listed on the New York Stock Exchange (the "NYSE").
proxy statement.
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 | |||||||
| 2019 | ||||
| Total Remuneration | $ | 5,983,505 | ||
| Annual Bonus as a Percentage of Maximum | 58 | % | ||
Performance Awards Vesting as a Percentage of Maximum(1) | N/A | |||
| 2019 | 2018 | 2017 | 2016 | 2015 | 2014(1) | |||||||||||||||||||
| Total Remuneration | $ | 6,502,955 | $ | 6,207,433 | $ | 5,906,374 | $ | 4,550,662 | $ | 4,933,408 | $ | 7,758,001 | ||||||||||||
| Annual Bonus as a Percentage of Maximum | 58 | % | 43 | % | 64 | % | 50 | % | 69 | % | 30 | % | ||||||||||||
| Performance Awards Vesting as a Percentage of Maximum | — | % | (2) | 34 | % | 12 | % | 7 | % | N/A | N/A | |||||||||||||
| 2014 | 2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||||||
| Total Remuneration | $ | 5,835,655 | $ | 9,878,742 | $ | 10,188,238 | $ | 10,897,191 | $ | 7,152,858 | $ | 4,619,128 | ||||||||||||
| Annual Bonus as a Percentage of Maximum | 30 | % | 54 | % | 77 | % | 61 | % | 68 | % | 66 | % | ||||||||||||
| Performance Awards Vesting as a Percentage of Maximum | 30 | % | 40 | % | 66 | % | 43 | % | 77 | % | 57 | % | ||||||||||||
| Name | Year | Salary and Fees ($) | Taxable Benefits ($)(3) | Annual Incentives ($)(4) | Long-Term Incentives ($)(5) | Pensions ($)(6) | Other ($)(7) | Total ($) | |||||||||||||||
Thomas P. Burke (1) | 2019 | 676,927 | 455,044 | 882,367 | — | 195,417 | 3,773,750 | 5,983,505 | |||||||||||||||
Carl G. Trowell(2) | 2019 | 629,168 | 71,499 | 802,288 | — | — | 5,000,000 | 6,502,955 | |||||||||||||||
| 2018 | 801,600 | 102,007 | 3,262,722 | 838,704 | — | 1,202,400 | 6,207,433 | ||||||||||||||||
| Name | Year | Group Term Life Insurance | Dividends on Share Awards* | Overseas Allowance** | Other | Total | |||||||||||||||
| Thomas P. Burke | 2019 | $ | 973 | $ | — | 449,851 | $ | 4,220 | $ | 455,044 | |||||||||||
| Carl G. Trowell | 2019 | $ | 628 | $ | 39,413 | — | $ | 31,458 | $ | 71,499 | |||||||||||
| 2018 | $ | 642 | $ | 61,285 | — | $ | 40,080 | $ | 102,007 | ||||||||||||
| Name | Year | Restricted Share Awards ($) | ECIP ($) | Total ($) | |||||||
| Thomas P. Burke | 2019 | — | 882,367 | 882,367 | |||||||
| Carl G. Trowell* | 2019 | — | 802,288 | 802,288 | |||||||
| 2018 | 2,500,000 | 762,722 | 3,262,722 | ||||||||
| Performance Measure | Weighting | Threshold | Target | Maximum | Actual Results | % of Target Earned | ||||||||||||
EBITDA (000)(1) | 40.0 | % | $175,000 | $220,000 | $255,000 | $205,700 | 33.6 | % | ||||||||||
| Synergies (000s) | 20.0 | % | $101,800 | $121,800 | $141,800 | $132,000 | 30.2 | % | ||||||||||
| PSI | 5.0 | % | 0.15 | 0.10 | 0.08 | 0.03 | 10.0 | % | ||||||||||
| TRIR | 5.0 | % | 0.40 | 0.35 | 0.30 | 0.28 | 10.0 | % | ||||||||||
| Downtime - Floaters | 5.0 | % | 4.50% | 3.50% | 3.00% | 4.12% | 3.5 | % | ||||||||||
| Downtime - Jackups | 5.0 | % | 2.10 | % | 1.60 | % | 1.35% | 1.61% | 5.0 | % | ||||||||
| STGs | 20.0 | % | 1.00 | 2.00 | 3.00 | 2.402 | 24.0 | % | ||||||||||
| TOTAL AWARD | 100.0 | % | 116.3 | % | ||||||||||||||
| Executive Officer | 2019 Target Opportunity | Weighted % of Target Earned | = | Formula-Derived ECIP Award | + | Discretionary Adjustment ($) | = | Actual ECIP Award | ||||||||
| x | ||||||||||||||||
| Thomas P. Burke | $ | 758,699 | 116.3 | % | $ | 882,367 | — | $ | 882,367 | |||||||
| Carl G. Trowell | $ | 689,843 | 116.3 | % | $ | 802,288 | — | $ | 802,288 | |||||||
| Performance Measure | Weight | Threshold | Target | Maximum | Actual Results | % of Target Payout Achieved | ||||||||||
| Relative TSR | 50% | Rank Award Multiplier | 5 of 7 0.67 | 4 of 7 1.00 | 1 of 7 2.0 | 6 | — | % | ||||||||
| Relative ROCE | 50% | Rank Award Multiplier | 5 of 7 0.67 | 4 of 7 1.00 | 1 of 7 2.0 | 3 | 144 | % | ||||||||
| Name | Year | Lump Sum Cash Payment | Bonus | SERP | Total | |||||||||||||
| Thomas P. Burke | 2019 | $ | 3,750,000 | $ | — | $ | 23,750 | $ | 3,773,750 | |||||||||
| Carl G. Trowell | 2019 | $ | 5,000,000 | $ | — | $ | — | $ | 5,000,000 | |||||||||
| 2018 | $ | — | $ | 1,202,400 | $ | — | $ | 1,202,400 | ||||||||||
Date of Grant | End of Period Over Which Qualifying Conditions Must be Fulfilled for Each Award(1) | Grant date Fair Value of Performance Unit Awards at Beginning of FY ($)(2)(3)(4) | Grant date Fair Value of Performance Unit Awards Granted During the FY ($)(2)(3) | Actual Payout Related to Awards Which Vested During the FY ($) | Grant date Fair Value of Performance Unit Awards at End of FY ($) | ||||||||||||
| Carl G. Trowell | 3/3/2016 | (4) | 31/12/2018 | 2,275,000 | — | 838,704 | — | ||||||||||
| 6/3/2017 | 31/12/2019 | 2,500,000 | — | N/A | — | (5) | |||||||||||
| 5/3/2018 | 31/12/2020 | 2,500,000 | — | N/A | — | (5) | |||||||||||
| 6/3/2019 | 31/12/2021 | — | 2,500,000 | N/A | — | (5) | |||||||||||
| Name | Year | Salary and Fees ($) | Taxable Benefits ($)(1) | Annual Incentives ($)(2) | Total ($) | |||||||||
| William E. Albrecht | 2019 | 114,583 | 5,763 | 200,009 | 320,355 | |||||||||
| Frederick Arnold | 2019 | 34,783 | 2,200 | 103,826 | 140,809 | |||||||||
| Mary E. Francis CBE | 2019 | 100,000 | 5,097 | 200,009 | 305,106 | |||||||||
| 2018 | 100,000 | 3,771 | 200,006 | 303,777 | ||||||||||
| Georges J. Lambert | 2019 | 38,587 | 1,113 | 111,477 | 151,177 | |||||||||
| Suzanne P. Nimocks | 2019 | 105,417 | 11,592 | 200,009 | 317,018 | |||||||||
| Thierry Pilenko | 2019 | 91,667 | 5,306 | 200,009 | 296,982 | |||||||||
| Keith O. Rattie | 2019 | 120,000 | 16,810 | 200,009 | 336,819 | |||||||||
| 2018 | 120,000 | 15,695 | 200,006 | 335,701 | ||||||||||
| Paul E. Rowsey, III | 2019 | 112,747 | 20,092 | 200,009 | 332,848 | |||||||||
| 2018 | 210,000 | 22,417 | 275,018 | 507,435 | ||||||||||
| Charles L. Szews | 2019 | 97,455 | 18,209 | 200,009 | 315,673 | |||||||||
| J. Roderick Clark | 2019 | 75,412 | 13,776 | 200,009 | 289,197 | |||||||||
| 2018 | 115,000 | 19,750 | 200,006 | 334,756 | ||||||||||
| Roxanne J. Decyk | 2019 | 2,747 | 2,721 | — | 5,468 | |||||||||
| 2018 | 100,000 | 17,431 | 200,006 | 317,437 | ||||||||||
| C. Christopher Gaut | 2019 | 75,000 | 7,222 | 200,009 | 282,231 | |||||||||
| 2018 | 100,000 | 7,542 | 200,006 | 307,548 | ||||||||||
| Jack E. Golden | 2019 | 2,747 | 2,098 | — | 4,845 | |||||||||
| 2018 | 100,000 | 3,998 | 200,006 | 304,004 | ||||||||||
| Gerald W. Haddock | 2019 | 2,747 | 3,234 | — | 5,981 | |||||||||
| 2018 | 100,000 | 19,155 | 200,006 | 319,161 | ||||||||||
| Francis S. Kalman | 2019 | 2,747 | 2,799 | — | 5,546 | |||||||||
| 2018 | 100,000 | 16,339 | 200,006 | 316,345 | ||||||||||
| Phil D. Wedemeyer | 2019 | 2,747 | 2,374 | — | 5,121 | |||||||||
| 2018 | 100,000 | 8,170 | 200,006 | 308,176 | ||||||||||
| Name | 2019 | 2018 | ||||||
| William E. Albrecht | $ | 5,241 | $ | — | ||||
| Fredrick Arnold | $ | — | $ | — | ||||
| Mary E. Francis CBE | $ | 3,258 | $ | 191 | ||||
| Georges J. Lambert | $ | 1,113 | $ | — | ||||
| Suzanne P. Nimocks | $ | 2,999 | $ | — | ||||
| Thierry Pilenko | $ | 5,306 | $ | — | ||||
| Keith O. Rattie | $ | 6,674 | $ | 3,792 | ||||
| Paul E. Rowsey, III | $ | 8,871 | $ | 9,043 | ||||
| Charles L. Szews | $ | 5,455 | $ | — | ||||
| J. Roderick Clark | $ | 5,946 | $ | 7,847 | ||||
| Roxanne J. Decyk | $ | 1,332 | $ | 5,528 | ||||
| C. Christopher Gaut | $ | 6,638 | $ | 5,300 | ||||
| Jack E. Golden | $ | 1,545 | $ | 1,892 | ||||
| Gerald W. Haddock | $ | 1,845 | $ | 7,252 | ||||
| Francis S. Kalman | $ | 1,410 | $ | 4,436 | ||||
| Phil D. Wedemeyer | $ | 1,911 | $ | 6,544 | ||||
Date of Grant | End of Period Over Which Qualifying Conditions Must be Fulfilled for Each Award(1) | Restricted Shares/Units Outstanding at Beginning of FY (#) | Restricted Shares/Units Granted During the FY (#) | Restricted Shares/Units Which Vested During the FY (#) | Market Price Per Share on Date of Grant ($) | Market Price Per Share on Vesting of Award ($) | Income Realised Upon Vesting ($) | Restricted Shares/Units Outstanding at End of FY (#) | ||||||||||||||||
| Thomas P. Burke | 11/4/2019 | (2) | (2) | — | 575,743 | — | 15.88 | N/A | N/A | 575,743 | ||||||||||||||
| Carl G. Trowell | 3/3/2016 | 3/3/2019 | (3) | 19,061 | — | 19,061 | 43.72 | 16.88 | 321,750 | — | ||||||||||||||
| 6/3/2017 | 6/3/2020 | (3) | 43,268 | — | 21,634 | 38.52 | 16.88 | 365,182 | 21,634 | |||||||||||||||
| 5/3/2018 | 5/3/2021 | (3) | 133,833 | — | 44,611 | 18.68 | 17.36 | 774,447 | 89,222 | |||||||||||||||
| 6/3/2019 | N/A | (4) | — | 148,104 | N/A | N/A | N/A | N/A | — | |||||||||||||||
| William Albrecht | 11/4/2019 | (2) | (2) | — | 12,686 | — | 15.88 | N/A | N/A | 12,686 | ||||||||||||||
| 3/6/2019 | 3/6/2020 | (8) | — | 22,806 | — | 8.77 | N/A | N/A | 22,806 | |||||||||||||||
| Frederick Arnold | 4/12/2019 | 4/12/2020 | (5) | — | 23,437 | — | 4.43 | N/A | N/A | 23,437 | ||||||||||||||
| Mary E. Francis CBE | 1/6/2016 | 1/6/2019 | (3) | 1,727 | — | 1,727 | 38.60 | 8.37 | 14,455 | — | ||||||||||||||
| 1/6/2017 | 1/6/2020 | (3) | 5,274 | — | 2,637 | 25.28 | 8.37 | 22,072 | 2,637 | |||||||||||||||
| 1/6/2018 | 1/6/2021 | (3) | 7,599 | — | 2,533 | 26.32 | 8.37 | 21,201 | 5,066 | |||||||||||||||
| 3/6/2019 | 3/6/2020 | (5) | — | 22,806 | — | 8.77 | N/A | N/A | 22,806 | |||||||||||||||
| Georges J. Lambert | 4/12/2019 | 4/12/2020 | (5) | — | 25,164 | — | 4.43 | N/A | N/A | 25,164 | ||||||||||||||
| Suzanne P. Nimocks | 11/4/2019 | (2) | (2) | — | 31,583 | 1,498 | 15.88 | 8.63 | 12,928 | 30,085 | ||||||||||||||
| 3/6/2019 | 3/6/2020 | (5) | — | 22,806 | — | 8.77 | N/A | N/A | 22,806 | |||||||||||||||
| Thierry Pilenko | 11/4/2019 | (2) | (2) | — | 19,380 | — | 15.88 | N/A | N/A | 19,380 | ||||||||||||||
| 3/6/2019 | 3/6/2020 | (8) | — | 22,806 | — | 8.77 | N/A | N/A | 22,806 | |||||||||||||||
| Keith O. Rattie | 1/6/2016 | 1/6/2019 | (3) | 1,727 | — | 1,727 | 38.60 | 8.37 | 14,455 | — | ||||||||||||||
| 1/6/2017 | 1/6/2020 | (3) | 5,274 | — | 2,637 | 25.28 | 8.37 | 22,072 | 2,637 | |||||||||||||||
| 1/6/2018 | 1/6/2021 | (3) | 7,599 | — | 2,533 | 26.32 | 8.37 | 21,201 | 5,066 | |||||||||||||||
| 3/6/2019 | 3/6/2020 | (5) | — | 22,806 | — | 8.77 | N/A | N/A | 22,806 | |||||||||||||||
| Paul E. Rowsey, III | 1/6/2016 | 1/6/2019 | (3) | 2,375 | — | 2,375 | 38.60 | 8.37 | 19,879 | — | ||||||||||||||
| 1/6/2017 | 1/6/2020 | (3) | 7,252 | — | 3,626 | 25.28 | 8.37 | 30,350 | 3,626 | |||||||||||||||
| 1/6/2018 | 1/6/2021 | (3) | 10,449 | — | 3,483 | 26.32 | 8.37 | 29,153 | 6,966 | |||||||||||||||
| 3/6/2019 | 3/6/2020 | (5) | — | 22,806 | — | 8.77 | N/A | N/A | 22,806 | |||||||||||||||
| Charles L. Szews | 11/4/2019 | (2) | (2) | 7,574 | 1,498 | 15.88 | 8.63 | 12,928 | 6,076 | |||||||||||||||
| 3/6/2019 | 3/6/2020 | (5) | — | 22,806 | — | 8.77 | N/A | N/A | 22,806 | |||||||||||||||
| J. Roderick Clark | 1/6/2016 | 1/6/2019 | (3) | 1,727 | — | 1,727 | 38.60 | 8.37 | 14,455 | — | ||||||||||||||
| 1/6/2017 | 12/11/2019 | (6) | 5,274 | — | 5,274 | 25.28 | (7) | 34,017 | — | |||||||||||||||
| 1/6/2018 | 12/11/2019 | (6) | 7,599 | — | 7,599 | 26.32 | (7) | 44,150 | — | |||||||||||||||
| 3/6/2019 | 12/11/2019 | (6) | — | 22,806 | 22,806 | 8.77 | 4.53 | 103,311 | — | |||||||||||||||
| Roxanne J. Decyk | 1/6/2016 | 11/4/2019 | (6) | 1,727 | — | 1,727 | 38.60 | 16.37 | 28,271 | — | ||||||||||||||
| 1/6/2017 | 11/4/2019 | (6) | 5,274 | — | 5,274 | 25.28 | 16.37 | 86,335 | — | |||||||||||||||
| 1/6/2018 | 11/4/2019 | (6) | 7,599 | — | 7,599 | 26.32 | 16.37 | 124,396 | — | |||||||||||||||
| C. Christopher Gaut | 1/6/2016 | 1/6/2019 | (3) | 1,727 | — | 1,727 | 38.60 | 8.37 | 14,455 | — | ||||||||||||||
| 1/6/2017 | 12/11/2019 | (6) | 5,274 | — | 5,274 | 25.28 | (7) | 34,017 | — | |||||||||||||||
| 1/6/2018 | 12/11/2019 | (6) | 7,599 | — | 7,599 | 26.32 | (7) | 44,150 | — | |||||||||||||||
| 3/6/2019 | 12/11/2019 | (6) | — | 22,806 | 22,806 | 8.77 | 4.53 | 103,311 | — | |||||||||||||||
Date of Grant | End of Period Over Which Qualifying Conditions Must be Fulfilled for Each Award(1) | Restricted Shares/Units Outstanding at Beginning of FY (#) | Restricted Shares/Units Granted During the FY (#) | Restricted Shares/Units Which Vested During the FY (#) | Market Price Per Share on Date of Grant ($) | Market Price Per Share on Vesting of Award ($) | Income Realised Upon Vesting ($) | Restricted Shares/Units Outstanding at End of FY (#) | ||||||||||||||||
| Jack E. Golden | 6/10/2017 | 11/4/2019 | (6) | 2,250 | — | 2,250 | 22.72 | 16.37 | 36,833 | — | ||||||||||||||
| 1/11/2017 | 11/4/2019 | (6) | 3,966 | — | 3,966 | 21.92 | 16.37 | 64,923 | — | |||||||||||||||
| 1/6/2018 | 11/4/2019 | (6) | 7,599 | — | 7,599 | 26.32 | 16.37 | 124,396 | — | |||||||||||||||
| Gerald W. Haddock | 1/6/2016 | 11/4/2019 | (6) | 1,727 | — | 1,727 | 38.60 | 16.37 | 28,271 | — | ||||||||||||||
| 1/6/2017 | 11/4/2019 | (6) | 5,274 | — | 5,274 | 25.28 | 16.37 | 86,335 | — | |||||||||||||||
| 1/6/2018 | 11/4/2019 | (6) | 7,599 | — | 7,599 | 26.32 | 16.37 | 124,396 | — | |||||||||||||||
| Francis S. Kalman | 1/6/2016 | 11/4/2019 | (6) | 1,727 | — | 1,727 | 38.60 | 16.37 | 28,271 | — | ||||||||||||||
| 1/6/2017 | 11/4/2019 | (6) | 5,274 | — | 5,274 | 25.28 | 16.37 | 86,335 | — | |||||||||||||||
| 1/6/2018 | 11/4/2019 | (6) | 7,599 | — | 7,599 | 26.32 | 16.37 | 124,396 | — | |||||||||||||||
| Phil D. Wedemeyer | 1/11/2017 | 11/4/2019 | (6) | 3,966 | — | 3,966 | 21.92 | 16.37 | 64,923 | — | ||||||||||||||
| 1/6/2018 | 11/4/2019 | (6) | 7,599 | — | 7,599 | 26.32 | 16.37 | 124,396 | — | |||||||||||||||
| Name | Unvested Restricted Shares/Units held as of 31 Dec 2019 | Unvested and Vested Deferred Restricted Shares/Units held as of 31 Dec 2019 | Unrestricted Shares held as of 31 Dec 2019 | Vested Unexercised Options & SARs held as of 31 Dec 2019 | Unvested Unexercised Options & SARs held as of 31 Dec 2019 | Unearned Performance Unit Awards held as of 31 Dec 2019 | Total Awards held as of 31 Dec 2019 | ||||||||||||||
| Executive Director | |||||||||||||||||||||
| Thomas P. Burke | 575,743 | — | 222,576 | 72,057 | 244,025 | — | 1,114,401 | ||||||||||||||
| Carl G. Trowell | 110,856 | — | 256,538 | — | — | — | 367,394 | ||||||||||||||
| Non-executive Directors | |||||||||||||||||||||
| William E. Albrecht | — | 35,492 | 16,857 | — | — | — | 52,349 | ||||||||||||||
| Fredrick Arnold | 23,437 | — | — | — | — | 23,437 | |||||||||||||||
| Mary E. Francis CBE | 30,509 | 9,643 | — | — | — | 40,152 | |||||||||||||||
| Georges J. Lambert | 25,164 | — | — | — | — | 25,164 | |||||||||||||||
| Suzanne P. Nimocks | 22,806 | 30,085 | 19,120 | — | — | — | 72,011 | ||||||||||||||
| Thierry Pilenko | — | 42,186 | 687 | — | — | — | 42,873 | ||||||||||||||
| Keith O. Rattie | 30,509 | 15,515 | — | — | — | 46,024 | |||||||||||||||
| Paul E. Rowsey, III | 33,398 | 30,594 | — | — | — | 63,992 | |||||||||||||||
| Charles L. Szews | 22,806 | 6,076 | 18,295 | — | — | — | 47,177 | ||||||||||||||
| Chief Executive Officer | Employees | ||||||
Percentage Change (2019 vs 2018) | Percentage Change (2019 vs 2018)(1) | ||||||
| Salary | 13.4 | % | 2.1 | % | |||
Taxable Benefits(2) | (57.6 | )% | 4.7 | % | |||
| Annual Incentives | 11.6 | % | 2.7 | % | |||
| 2019 | 2018 | Percentage Change | ||||||||||
| Employee Pay | $ | 760,100,000 | $ | 564,500,000 | 35 | % | ||||||
| Dividend Payments | $ | 4,500,000 | $ | 17,900,000 | (75 | )% | (2) | |||||
Capital Expenditures(1) | $ | 227,000,000 | $ | 426,700,000 | (47 | )% | ||||||
| Quartile Position | Employee Job Title | Employee Base Salary | Total Remuneration | CEO Pay Ratio | ||||||||
| Lower | Floorhand | $ | 60,599 | $ | 60,599 | 1-to-104 | ||||||
| Median | Welder | $ | 76,243 | $ | 76,243 | 1-to-83 | ||||||
| Upper | Electrician | $ | 108,411 | $ | 108,411 | 1-to-58 | ||||||
| ||||||||
ATTN: INVESTOR RELATIONS 5847 SAN FELIPE SUITE 3300 HOUSTON, TX 77057 | ||||||||
VOTE DEADLINE – 3:00 p.m. Eastern Time on VOTE BY INTERNET – www.proxyvote.com Have your proxy card in hand when you access the website and follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company, consent to receive all future proxy materials and annual reports electronically via e-mail or the Internet. To sign up, please follow the Vote by Internet instructions and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. The "Abstain" option is provided to enable you to refrain from voting on any particular resolution. However, it should be noted that selecting "Abstain" will not be counted in the calculation of the proportion of the votes "For" and "Against" a | ||||||||
| TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | x Valaris1 | KEEP THIS PORTION FOR YOUR RECORDS | ||||||||||||
| DETACH AND RETURN THIS PORTION ONLY | ||||||||||||||
| THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. | ||||||||||||||
| Valaris plc | ||||||||||
| The Board of Directors recommends you vote "For" each nominee in Resolution 1 and "For" Resolutions 2 through 12. | ||||||||||
| 1. | To re-elect Directors to serve until the 2021 Annual General Meeting of Shareholders | |||||||||
| Nominees: | For | Against | Abstain | For | Against | Abstain | ||||
| 1a. William E. Albrecht | ¨ | ¨ | ¨ | 5. | To approve an amendment to the 2018 Long-Term Incentive Plan | ¨ | ¨ | ¨ | ||
| 1b. Frederick Arnold | ¨ | ¨ | ¨ | |||||||
| 1c. Thomas P. Burke | ¨ | ¨ | ¨ | 6. | To approve the Directors' Remuneration Policy | ¨ | ¨ | ¨ | ||
| 1d. Mary E. Francis CBE | ¨ | ¨ | ¨ | |||||||
| 1e. Georges J. Lambert | ¨ | ¨ | ¨ | |||||||
| 1f. Suzanne P. Nimocks | ¨ | ¨ | ¨ | 7. | A non-binding advisory vote to approve the Directors Remuneration Report for the year ended 31 December 2019. | ¬ | ¬ | ¬ | ||
| 1g. Thierry Pilenko | ¨ | ¨ | ¨ | 8. | A non-binding advisory vote to approve the compensation of our named executive officers. | ¬ | ¬ | ¬ | ||
| 1h. Paul E. Rowsey, III | ¨ | ¨ | ¨ | 9. | A non-binding advisory vote to approve the reports of the auditors and the directors and the U.K. statutory accounts for the year ended 31 December 2019. | ¬ | ¬ | ¬ | ||
| 1i. Charles L. Szews | ¨ | ¨ | ¨ | |||||||
| 10. | To authorise the Board of Directors to allot shares, the full text of which can be found in "Resolution 10" of the accompanying proxy statement. | ¬ | ¬ | ¬ | ||||||
| 1j. Adam Weitzman | ¨ | ¨ | ¨ | |||||||
| 2. | To ratify the Audit Committee's appointment of KPMG LLP (U.S.) as our U.S. independent registered public accounting firm for the year ending 31 December 2020. | ¨ | ¨ | ¨ | 11. | To approve the general disapplication of pre-emption rights, the full text of which can be found in "Resolution 11" of the accompanying proxy statement. | ¬ | ¬ | ¬ | |
| 12. | To approve the disapplication of pre-emption rights in connection with an acquisition or specified capital investment, the full text of which can be found in "Resolution 12" of the accompanying proxy statement. | ¬ | ¬ | ¬ | ||||||
| 3. | To appoint KPMG LLP (U.K.) as our U.K. statutory auditors under the U.K. Companies Act 2006 (to hold office from the conclusion of the Annual General Meeting of Shareholders until the conclusion of the next Annual General Meeting of Shareholders at which accounts are laid before the Company). | ¨ | ¨ | ¨ | ||||||
| 4. | To authorise the Audit Committee to determine our U.K. statutory auditors' remuneration. | ¨ | ¨ | ¨ | ||||||
| Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation, limited liability company or partnership, please sign in full corporate, limited liability company or partnership name by authorised officer. The completion and return of this form will not preclude a shareholder from attending the meeting and voting in person. | ||||||||||
| Valaris Limited | ||||||||||||||||||||||||||||||||
| The Board of Directors of Valaris (the "Board") recommends you vote "For" each nominee in Resolution 1 and "For" Resolutions 2 and 3 | ||||||||||||||||||||||||||||||||
| 1. | To elect Directors to serve until the 2023 Annual General Meeting of Shareholders | |||||||||||||||||||||||||||||||
| Nominees: | For | Against | Abstain | For | Against | Abstain | ||||||||||||||||||||||||||
| 1a. Anton Dibowitz | ¨ | ¨ | ¨ | 2. | To approve the appointment of KPMG LLP as our independent registered public accounting firm until the close of the 2023 Annual General Meeting of Shareholders and to authorize the Board, acting by its Audit Committee, to set KPMG LLP's remuneration. | ¨ | ¨ | ¨ | ||||||||||||||||||||||||
| 1b. Gunnar Eliassen | ¨ | ¨ | ¨ | |||||||||||||||||||||||||||||
| 1c. Dick Fagerstal | ¨ | ¨ | ¨ | |||||||||||||||||||||||||||||
| 1d. Joseph Goldschmid | ¨ | ¨ | ¨ | 3. | To approve on a non-binding advisory basis the compensation of our named executive officers. | ¨ | ¨ | ¨ | ||||||||||||||||||||||||
| 1e. Elizabeth D. Leykum | ¨ | ¨ | ¨ | |||||||||||||||||||||||||||||
| 1f. Deepak Munganahalli | ¨ | ¨ | ¨ | |||||||||||||||||||||||||||||
| 1g. James W. Swent, III | ¨ | ¨ | ¨ | |||||||||||||||||||||||||||||
| Please sign exactly as your name(s) appear(s) herein. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation, limited liability company or partnership, please sign in full corporate, limited liability company or partnership name by an authorized officer. The completion and return of this form will not preclude a shareholder from attending the meeting and voting in person provided such shareholder has specifically requested for this proxy to be revoked. | ||||||||||||||||||||||||||||||||
| Signature [PLEASE SIGN WITHIN BOX] | Date | Signature (Joint Owners) | Date | ||||||||||||||||||||
ANNUAL GENERAL MEETING OF SHAREHOLDERS OF
Valaris plcLimited
Please mark, date, sign and mail
the proxy card in the
envelope provided as soon as possible
TO BE RECEIVED NO LATER THAN 3:00 P.M. EASTERN TIME 127 JUNE 2020
to ensure that your vote is counted.
Important Notice Regarding the Availability of Proxy Materials for the Annual General Meeting of Shareholders to be Held on 158 June 2020:2022:
The Notice, Proxy Statement and Annual Report and United Kingdom Statutory Accounts are available at www.proxyvote.com.
| If voting by mail, please detach along perforated line and mail in the envelope provided. | ||
PROXY
Valaris plcLimited
at 12:8:00 p.m. Londona.m. Bermuda Time, Monday, 15Wednesday, 8 June 20202022
116 South Shore Road, Tucker's Town, Smiths HS 01, Bermuda
The undersigned shareholder of Valaris plcLimited hereby revokes all previous proxies and appoints Thomas P. BurkeAnton Dibowitz, President and Michael T. McGuintyChief Executive Officer, and Davor Vukadin, Company Secretary, or the Chair of the Meeting, or any oneeither of them, as proxies, each with full power of substitution and authority, to represent and vote as designated in this proxy all the shares that the undersigned shareholder is entitled to vote the following number of shares of the undersigned at the above-stated Annual General Meeting of Shareholders and any adjournment(s)adjournments or postponements thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF VALARIS LIMITED AND WILL BE VOTED IN ACCORDANCE WITH THE SPECIFICATIONS MADE HEREIN. IF A CHOICE IS NOT INDICATED WITH RESPECT TO RESOLUTIONS 1, THROUGH 12,2 AND 3, THIS PROXY WILL BE VOTED "FOR" EACH NOMINEE IN RESOLUTION 1 AND "FOR" EACH OF THE RESOLUTIONS 2 THROUGH 12AND 3 AND AT THE DISCRETION OF THE PERSONS DESIGNATED BY THE BOARD OF DIRECTORS AS YOUR PROXIES UPON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING AND ANY ADJOURNMENTS OR POSTPONEMENTS THEREOF. (INCLUDING, IF APPLICABLE, ON ANY MATTER WHICH THE BOARD OF DIRECTORS DID NOT KNOW WOULD BE PRESENTED AT THE MEETING BY A REASONABLE TIME BEFORE THE PROXY SOLICITATION WAS MADE OR FOR THE ELECTION OF A PERSON TO THE BOARD OF DIRECTORS IF ANY NOMINEE NAMED IN RESOLUTION 1 BECOMES UNABLE TO SERVE OR FOR GOOD CAUSE WILL NOT SERVE). THIS PROXY IS REVOCABLE AT ANY TIME BEFORE IT IS EXERCISED.
Your Board of Directors recommends a vote "FOR" each nominee in Resolution 1 and "FOR" Resolutions 2 through 12.and 3.
Continued and to be marked, dated and signed on the reverse side