UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
| 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 under Rule 14a-12 |
NOBLE CORPORATION
| þ | No fee required. | |||
| o | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. | |||
| Title of each class of securities to which transaction applies: | ||||
| Aggregate number of securities to which transaction applies: | ||||
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| o | Fee paid previously with preliminary materials. | |
| o | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
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| (4) | Date Filed: | |||
May 1, 2008
| 1. | To elect two directors to the class of directors whose three-year term will expire in | |||
| 2. | ||||
| To approve the appointment of PricewaterhouseCoopers LLP as independent auditors for | ||||
| To transact such other business as may properly come before the meeting or any adjournment thereof. | ||||
| By Order of the Board of Directors | ||||
| Julie J. Robertson | ||||
| Secretary | ||||
This proxy statement is furnished to members of Noble Corporation (the “Company”) in connection with the solicitation by our board of directors (“Board”) of proxies for use at the annual general meeting of members to be held on Thursday, May 1, 2008, at 10:00 a.m., local time, at the time and placeHotel Granduca, 1080 Uptown Park Boulevard, Houston, Texas, and for the purposes set forth in the accompanying notice. The approximate date of mailing of this proxy statement and the accompanying proxy or voting instruction card is March 1826, 2008.
Proxies and Voting Instructions
voting methods. Please have your proxy card available when voting via either the telephone or Internet. You will be prompted to provide your unique “Control Number” for security purposes. This number will be provided on your proxy card.
| • | Telephone– Call toll free | ||
| 30, 2008. | |||
| • | Internet– | ||
| 30, 2008. | |||
| • | Proxy Card– Complete, sign and date your proxy card and mail it in the |
| • | Giving written notice of the revocation to our corporate secretary; | ||
| • | Appearing and voting in person at the annual general meeting; or | ||
| • | Properly submitting a later-dated proxy by telephone, via the Internet or by delivering a later-dated proxy card to our corporate secretary. |
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If you were a participant in the Noble Drilling Corporation 401(k) Savings Plan on the record date for the meeting, you should receive a voting instruction card. You can provide instructions to the plan trustee as to how to vote Ordinary Shares held in the plan by calling the telephone number or visiting the Internet site as set forth above, or by completing, signing, dating and mailing the voting instruction card in the postage paidpostage-paid envelope.
Our only outstanding voting securities are ourthe Ordinary Shares. Only holders of record of Ordinary Shares at the close of business on March 3, 2005,6, 2008, the record date for the annual general meeting, are entitled to notice of and to vote at the annual general meeting. On the record date for the annual general meeting, there were 135,569,061268,635,604 Ordinary Shares outstanding and entitled to be voted at the annual general meeting. A majority of such shares, present in person or represented by proxy, is necessary to constitute a quorum. Each Ordinary Share is entitled to one vote. Under Cayman Islands law, the holders of ourthe Ordinary Shares do not have appraisal rights with respect to matters to be voted upon at the annual general meeting.
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| Ordinary Shares Beneficially Owned | ||||||||
| Name and Address of Beneficial Owner | Number of Shares | Percent of Class | ||||||
| FMR Corp | ||||||||
| 82 Devonshire Street | ||||||||
| Boston, Massachusetts 02109 | 15,786,469 | (1) | 11.7 | % | ||||
| Massachusetts Financial Services Company | ||||||||
| 500 Boylston Street | ||||||||
| Boston, Massachusetts 02116 | 13,331,519 | (2) | 9.8 | % | ||||
| Capital Research and Management Company | ||||||||
| 333 South Hope Street | ||||||||
| Los Angeles, California 90071 | 11,668,400 | (3) | 8.8 | % | ||||
| Franklin Resources, Inc | ||||||||
| One Franklin Parkway | ||||||||
| San Mateo, California 94403 | 7,262,300 | (4) | 5.4 | % | ||||
| Ordinary Shares Beneficially Owned | ||||||||
Name and Address of Beneficial Owner | Number of Shares | Percent of Class | ||||||
| FMR LLC (1) | 19,376,682 | 7.2 | % | |||||
| 82 Devonshire Street Boston, Massachusetts 02109 | ||||||||
| Barclays Global Investors, NA (2) | 15,703,795 | 5.84 | % | |||||
| 45 Fremont Street San Francisco, California 94105 | ||||||||
| (1) | Based on a Schedule 13G (Amendment No. | |
| (2) | Based on a Schedule 13G | |
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The Company’s Our memorandum and articles of association provide for three classes of directors, with approximately one-third of the directors constituting our board of directors (“Board”)Board being elected each year to serve a three-year term. There are three directors comprising the class whose term expires at the 20052008 annual general meeting: Lawrence J. Chazen, Mary P. Ricciardello and William A. Sears.
The directors nominated for election this year will be elected by a plurality of the Ordinary Shares present in person or represented by proxy at the annual general meeting and entitled to vote. All duly submitted and unrevoked proxies will be voted for the nominees selected by our Board, except where authorization so to vote is withheld.Our Board unanimously recommends that members vote FOR the election of its nominees for director.
Nominees ForForDirectors
Lawrence J. Chazen, | ||
| age | Mr. Chazen has served since 1977 as Chief Executive Officer of Lawrence J. Chazen, Inc., a California registered investment adviser engaged in providing financial advisory services. | |
Mary P. Ricciardello, | ||
| age | Ms. Ricciardello served as Senior Vice President and Chief Accounting Officer of Reliant Energy, Inc. from January 2001 to August 2002, and immediately prior to that served as its Senior Vice President and Comptroller from September 1999 to January 2001 and as its Vice President and Comptroller from 1996 to September 1999. Ms. Ricciardello also served as Senior Vice President and Chief Accounting Officer of Reliant Resources, Inc. from May 2001 to August 2002. Reliant principally provides electricity and energy services to retail and wholesale customers. Ms. Ricciardello’s current principal occupation is as a certified public accountant, and she has not held a principal employment since leaving her positions with Reliant Energy, Inc. and Reliant Resources, Inc. in August 2002. Ms. Ricciardello is also a director of U.S. Concrete, Inc. and Devon Energy Corporation. |
| age |
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ClassWhoseTermExpiresIn 2006
Marc E. Leland, | ||
| age | Mr. Leland has served since 1984 as President of Marc E. Leland & Associates, Inc., a company engaged in the business of providing financial advisory services. | |
David W. Williams, | ||
| age 50, director since January 2, 2008 | Mr. Williams has served as Chairman of the Board, Chief Executive Officer and President of the Company since January 2, 2008. Mr. Williams served as Senior Vice President – Business Development of Noble Drilling Services Inc., an indirect, wholly-owned subsidiary of the Company, from September 2006 to January 2007, as Senior Vice President – Operations of Noble Drilling Services Inc. from January to April 2007, and as Senior Vice President and Chief Operating Officer of the Company from April 2007 to January 2, 2008. Prior to September 2006, Mr. Williams served for more than five years as Executive Vice President of Diamond Offshore Drilling, Inc., an offshore oil and gas drilling contractor. |
ClassWhoseTermExpiresIn20072010
Michael A. Cawley, | ||
| age | Mr. Cawley has served as President and Chief Executive Officer of The Samuel Roberts Noble Foundation, Inc., a not-for-profit corporation (the “Noble Foundation”), since February 1992, after serving as Executive Vice President of the Noble Foundation since January 1991. Mr. Cawley has served as a trustee of the Noble Foundation since 1988. The Noble Foundation is a not-for-profit corporation, and it is engaged in agricultural research, education, demonstration and consultation; plant biology and applied biotechnology; and assistance through granting to selected nonprofit organizations. For more than five years prior to 1991, Mr. Cawley was the President of Thompson & Cawley, a professional corporation, attorneys at law; and Mr. Cawley currently serves as of counsel to the law firm of Thompson, Cawley, Veazey & Burns, a professional corporation. Mr. Cawley is also a director of Noble Energy, Inc. | |
Luke R. Corbett, | ||
| age | Mr. Corbett has served as a director of Anadarko Petroleum Corporation since August 2006. Anadarko engages in the exploration, development, production, and marketing of natural gas, crude oil, condensate, and natural gas liquids primarily in the United States. Mr. Corbett served as Chairman of the Board and Chief Executive Officer of Kerr-McGee Corporation | |
Jack E. Little, | ||
| age | Mr. Little served as President and Chief Executive Officer of Shell Oil Company, and a member of the Board of Directors and Chairman and Chief Executive Officer of Shell Exploration & Production Company for more than five years until his retirement in June 1999. Shell Oil Company and its subsidiaries, with extensive operations in the United States, explore, develop, produce, purchase, transport and market crude oil and natural gas; they also purchase, manufacture, transport and market oil and chemical products and provide technical and business services. |
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| • | the director was employed by the Company; | ||
| • | an immediate family member of the director was an executive officer of the Company; | ||
| • | the director or an immediate family member of the director received more than $100,000 per year in direct compensation from the Company, other than director and committee fees and pension or other forms of deferred compensation for prior service (provided such service is not contingent in any way on continued service); | ||
| • | the director was affiliated with or employed by, or an immediate family member of the director was affiliated with or employed in a professional capacity by, a present or former internal or external auditor of the Company; | ||
| • | the director or an immediate family member of the director was employed as an executive officer of another company where any of the Company’s present executives serve on that company’s compensation committee; or | ||
| • | the director is an executive officer or an employee, or an immediate family member of the director is an executive officer, of a company that made payments to, or received payments from, the Company for property or services in an amount which, in any single fiscal year, exceeded the greater of $1 million or two percent of such other company’s consolidated gross revenues. |
| • | that does business with the Company, and the amount of the annual payments to the Company is less than five percent of the annual consolidated gross revenues of the Company; | ||
| • | that does business with the Company, and the amount of the annual payments by the Company to such other company is less than five percent of the annual consolidated gross revenues of the Company; or | ||
| • | to which the Company was indebted at the end of its last fiscal year in an aggregate amount that is less than five percent of the consolidated assets of the Company. |
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For additional information regarding the determination of independence of directors, see “Certain Transactions” below in this section.
and are available in print to any member who requests them.
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practices relating to corporate governance; and to oversee the process by which our Board, theour Chief Executive Officer and executive management are evaluated.
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Compensation Committee Interlocks and Insider Participation. Messrs. Cawley,meetings, except Mr. Corbett and Leland, the current members of the compensation committee, were the only personsMs. Edwards who served on the committee during 2004. For additional information regarding Mr. Corbett, see “Certain Transactions” below in this section.
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Member Communications with Directors
| • | mail Noble Corporation, Attention: Corporate Secretary, 13135 South Dairy Ashford, Suite 800, Sugar Land, Texas 77478; | ||
| • | e-mail | ||
| • | telephone the NobleLine (toll-free and anonymous, available 24 hours a day, seven days a week) at 877-285-4162. |
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The compensation committee of our Board sets Transactions with related persons are reviewed, approved or ratified in accordance with the compensation of our directors. In determining the appropriate level of compensation for our directors, the compensation committee considers the commitment required from our directors in performing their duties on behalf of the Company, as well as comparative information the committee obtains from an independent compensation consulting firmpolicies and from other sources. Set forth below is a description of the compensation of our directors.
Annual Retainers and Other Fees and Expenses.We pay our non-employee directors an annual retainer of $35,000 ($50,000, subject to member approval for the period effective after August 1, 2004), of which 20 percent is paid in Ordinary Shares pursuant to the Noble Corporation Equity Compensation Plan for Non-Employee Directors. Under this plan, non-employee directors may elect to receive up to all of the balance in Ordinary Shares or cash. Non-employee directors make elections on a quarterly basis. The number of Ordinary Shares to be issued under the plan in any particular quarter is generally determined using the average of the daily closing prices of the Ordinary Shares for the last 15 consecutive trading days of the previous quarter. For more information regarding the plan and the proposal being submitted for member approval at the annual general meeting, see “Proposal to Amend the Noble Corporation Equity Compensation Plan for Non-Employee Directors” beginning on page 26 of this proxy statement.
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In addition, we pay our non-employee directors a Board meeting fee of $2,000 and a committee meeting fee of $2,000 per meeting. Prior to August 1, 2004, the committee meeting fee was $1,500 per meeting and the chair of a standing Board committee received an additional $1,000 per committee meeting. Since August 1, 2004, the chair of the audit committee receives an annual retainer of $12,000 and the chair of each other standing Board committee receives an annual retainer of $10,000. We pay a director who is also one of our officers a fee of $100 for each Board meeting attended. We also reimburse directors for travel, lodging and related expenses they may incur in attending Board and committee meetings.
Non-Employee Director Stock Options.Under the Noble Corporation 1992 Nonqualified Stock Option Plan for Non-Employee Directors (the “1992 Plan”), non-employee directors receive a one-time grant of an option to purchase 10,000 Ordinary Shares. Thereafter, on the next business day after each annual general meeting of members of the Company, such directors receive an annual grant of an option to purchase 7,500 Ordinary Shares. The options are granted at fair market value on the grant date, which is generally determined using the average of the daily closing prices of the Ordinary Shares for the 10 business days immediately preceding the date of grant, and are exercisable from time to time over a period commencing one year from the grant date and ending on the expiration of 10 years from the grant date, unless terminated sooner as described in the plan. For additional information regarding the plan and the proposal being submitted for member approval at the annual general meeting, see “Proposal Regarding the Noble Corporation 1992 Nonquailifed Stock Option Plan for Non-Employee Directors” beginning on page 22 of this proxy statement.
Employment Agreements
The Company has entered into employment agreements with each named executive officer listed in the Summary Compensation Table appearing on page 15 of this proxy statement. These employment agreements become effective upon a change of control of the Company (within the meaningprocedures set forth in our code of business conduct and ethics and our administrative policy manual, the agreements)procedures described below with respect to director and officer questionnaires, and the other procedures described below.
The agreements provide that ifconflict, potential conflict or an uncertainty as to whether a conflict exists should bring the officer’s employment is terminated within three years after a change of control or priormatter to but in anticipationthe attention of a changesupervisor, manager or other appropriate personnel. The Company’s Board and its senior management review all reported relationships and transactions in which the Company and any director, officer or family member of control, either (1) by us for reasons other than death, disabilitya director or “cause” (as definedofficer are participants to determine whether an actual or potential conflict of interest exists. Our Board may approve or ratify any such relationship or transaction if our Board determines that such relationship or transaction is in the agreement) or (2) bybest interests (or not inconsistent with the officer for “good reason” (which term includes a diminution of responsibilities or compensation, or a determination by the officer to leave during the 30-day period immediately following the first anniversary of the change of control), the officer will receive: (a) any unpaid portion of his current salary and prorated portion of his highest bonus paid either in the last three years before the change of control or for the last completed fiscal year after the change of control (the “Highest Bonus”); (b) a lump sum payment equal to three times the sum of his annual base salary (based on the highest monthly salary paid in the 12 months prior to the change of control) and his Highest Bonus; (c) benefits to him and his family at least equal to those which would have been provided had the employment not been terminated for a three-year period; (d) any compensation previously deferred by the officer (together with any accrued interest or earnings thereon) and any accrued vacation pay; and (e) a lump sum amount equal to the excess of (i) the actuarial equivalent of the benefit under the qualified defined benefit retirement planbest interests) of the Company and its affiliated companiesmembers. A conflict of interest exists when an individual’s personal interest is adverse to or otherwise in whichconflict with the officer is eligible to participate had the officer’s employment continued for three years after termination over (ii) the actuarial equivalent of the officer’s actual benefit under such plans. The agreements also require the Company to make an additional payment in an amount such that after the payment of all income and excise taxes, the officer will be in the same after-tax position as if no excise tax under Section 4999 (the so-called Parachute Payment excise tax) of the U.S. Internal Revenue Code of 1986, if any, had been imposed.
Certain Transactions
Subsidiaries of the Company received an aggregate of approximately $44.3 million in 2004 from Kerr-McGee Corporation (or its subsidiaries) for contract drilling services performed by the Company’s subsidiaries in the ordinary course of business. The drilling contracts for such services were negotiated and entered into under competitive marketplace conditions. The Company believes that these transactions during 2004 were on terms that were reasonable and in the best interests of the Company.
| • | an employee, officer or director or a member of his or her family receives improper personal benefits because of such employee’s, officer’s or director’s position in the Company; | ||
| • | a loan by the Company to, or a guarantee by the Company of an obligation of, an employee or his or her family member is made; | ||
| • | an employee works for or has any direct or indirect business connection with any of our competitors, customers or suppliers; or | ||
| • | Company assets and properties are used for personal gain or Company business opportunities are usurped for personal gain. |
| • | subject to certain limited exceptions, an employee or consultant or any member of his or her immediate family has an interest in any business entity that deals with the Company where there is an opportunity for preferential treatment to be given or received; | ||
| • | an employee or consultant serves as an officer, a director, or in any management capacity of another business entity directly or indirectly related to the contract drilling or energy services industries without specific authority from our Board; |
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| • | an employee or consultant or any member of his or her immediate family buys, sells or leases any kind of property, facilities or equipment from or to the Company or any of its subsidiaries or to any business entity or individual who is or is seeking to become a contractor, supplier or customer, without specific authority from our Board; or | ||
| • | subject to certain limited exceptions, an employee or consultant or any member of his or her immediate family accepts gifts, payments, extravagant entertainment, services or loans in any form from anyone soliciting business, or who may already have established business relations, with the Company. |
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| Ordinary Shares | Ordinary Shares | |||||||||||||||||||
| Beneficially Owned (1) | Beneficially Owned (1) | |||||||||||||||||||
| Number of | Percent of | Number of | Percent of | |||||||||||||||||
| Name | Shares | Class (2) | Shares | Class (2) | ||||||||||||||||
| Directors | ||||||||||||||||||||
| Michael A. Cawley | 924,591 | (3)(4) | 0.7 | % | 1,862,773 | (3)(4) | 0.7 | % | ||||||||||||
| Lawrence J. Chazen | 37,733 | (3) | — | 77,994 | (3) | — | ||||||||||||||
| Luke R. Corbett | 25,732 | (3) | — | 82,478 | (3) | — | ||||||||||||||
| James C. Day | 1,820,237 | (3)(4) | 1.3 | % | ||||||||||||||||
| Julie H. Edwards | 34,790 | (3) | — | |||||||||||||||||
| Marc E. Leland | 55,592 | (3) | — | 141,772 | (3) | 0.1 | % | |||||||||||||
| Jack E. Little | 42,032 | (3) | — | 117,675 | (3) | — | ||||||||||||||
| Mary P. Ricciardello | 11,189 | (3) | — | 53,718 | (3) | — | ||||||||||||||
| William A. Sears | 59,505 | (3) | — | 166,619 | (3) | 0.1 | % | |||||||||||||
| David W. Williams | 229,736 | (3) | 0.1 | % | ||||||||||||||||
Named Executive Officers (excluding any Director above) and Group | ||||||||||||||||||||
| Julie J. Robertson | 1,019,326 | (3) | 0.4 | % | ||||||||||||||||
| Thomas L. Mitchell | 169,339 | (3) | 0.1 | % | ||||||||||||||||
| Robert D. Campbell | 100,457 | (3) | — | |||||||||||||||||
| James C. Day | 2,579,376 | (3)(4)(5) | 1.0 | % | ||||||||||||||||
| Mark A. Jackson | 186,635 | (3) | 0.1 | % | 227,452 | (3)(6) | 0.1 | % | ||||||||||||
| Danny W. Adkins | 31,670 | (3) | — | |||||||||||||||||
| Julie J. Robertson | 438,057 | (3) | 0.3 | % | ||||||||||||||||
All directors and executive officers as a group (11 persons) | 2,758,334 | (5) | 2.0 | % | ||||||||||||||||
All directors and named executive officers as a group (14 persons) | 5,114,227 | (7) | 1.9 | % | ||||||||||||||||
| (1) | Unless otherwise indicated, the beneficial owner has sole voting and investment power with respect to all shares listed. | |
| (2) | The percent of class shown is less than one-tenth of one percent unless otherwise indicated. | |
| (3) | Includes shares attributable to Ordinary Shares not outstanding but subject to | |
| (4) | Includes | |
| (5) | Includes | |
| (6) | Based on information provided to the Company on behalf of Mr. Jackson. | |
| (7) | Includes 1,761,350 Ordinary Shares not outstanding but subject to | |
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Share Ownership by Executives
We encourage all of our executives to align their interests with our members by making a personal investment in our Ordinary Shares. In 2000, we adopted the minimum ownership guidelines set forth below for our executives. We expect that each of our executives will meet these minimum guidelines within five years of when the guidelines first apply to him or her. To facilitate implementation of these guidelines, executives in the indicated pay grade levels will receive one-half of any bonus amounts under the Company’s Short Term Incentive Plan in Ordinary Shares until the applicable ownership target is satisfied. For additional information regarding the Short Term Incentive Plan, see “Compensation Philosophy and Objectives – Annual Incentives” in the compensation committee’s report beginning on page 12 of this proxy statement.
EXECUTIVE COMPENSATION
The following report of the compensation committee on executive compensation and the information herein under “Executive Compensation – Performance Graph” shall not be deemed to be “soliciting material” or to be “filed” with the SEC or subject to the SEC’s proxy rules, except for the required disclosure herein, or to the liabilities of Section 18 of the Exchange Act, and such information shall not be deemed to be incorporated by reference into any filing made by the Company under the Securities Act of 1933 or the Exchange Act.
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To the Members ofNoble Corporation:
The Compensation Committee is responsible for determining the compensation of executive officers, including the compensation of the Chief Executive Officer,Discussion and for assisting the board of directors (the “Board”) in reviewing and administering the compensation programs, benefits, incentive and equity-based compensation plans that make it possible for Noble Corporation (the “Company”) to remain a leader in the drilling industry.
Comprised entirely of independent, non-management directors of the Company, the Committee met five times in 2004. Additionally, the Chairman of the Committee met on several occasions with members of senior management and independent compensation consultants.
The Committee has retained the services of an independent management and compensation consulting firm in making its determinations and recommendations in regard to executive compensation. In 2004, this consultant reviewed the Company’s compensation program and policies, presented reports thereon to the Committee, and held two meetings with the Committee.
Analysis
Compensation surveys of external competitiveness are When used in assessing reasonablenessthis Compensation Discussion and Analysis section, the term “named executive officers” means those persons listed in the Summary Compensation Table.
| David W. | Julie J. | Thomas L. | Robert D. | |||||||||||||
| Compensation Component | Williams | Robertson | Mitchell | Campbell | ||||||||||||
| Equity-based incentives or performance-based pay (1) | 72 | % (3) | 58 | % | 73 | % (3) | 56 | % | ||||||||
| Not equity-based incentives or performance-based pay (2) | 28 | % | 42 | % | 27 | % | 44 | % | ||||||||
| Total Compensation | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||
| (1) | Percentage represents the sum of the dollar amounts in the Stock Awards, Option Awards, and Non-Equity Incentive Plan Compensation columns of the Summary Compensation Table divided by the amount set forth in the Total column. |
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| (2) | Percentage represents the sum of the dollar amounts in the Salary, Bonus, Change in Pension Value and Nonqualified Deferred Compensation Earnings, and All Other Compensation columns of the Summary Compensation Table divided by the amount set forth in the Total column. | |
| (3) | Percentages reflect grants of nonqualified stock options and awards of restricted Ordinary Shares (“Restricted Shares”) made in 2006 at the time the named executive officer joined the Company. Effective September 20, 2006, Mr. Williams received an award of 100,000 time-vested Restricted Shares and a grant of 100,000 nonqualified stock options. Effective November 6, 2006, Mr. Mitchell received an award of 80,000 time-vested Restricted Shares and a grant of 80,000 nonqualified stock options. Each of these awards and grants has a three-year vesting period and, pursuant to Statement of Financial Accounting Standards No. 123 (revised 2004),Share-Based Payment (“SFAS No. 123R”), the grant date fair value of each such award and grant is recognized on a straight line basis as an expense to the Company over the service period (which generally represents the vesting period). The dollar amounts in the Stock Awards and Option Awards columns of the Summary Compensation Table include the amounts recognized in 2007 by the Company pursuant to SFAS No. 123R for these awards and grants. These equity-based awards and grants reflect the results of direct negotiations with each of Mr. Williams and Mr. Mitchell, and their respective backgrounds and experience. |
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| Direct Peer Group | Broad Energy Peer Group | General Industry Peer Group | ||||||||
• | Rationale: Provides market data on companies that are very similar to us in terms of business activities, operations, revenue size and scope | • | Rationale: Provides market data on companies that are similar to us in terms of competition for executive talent, energy industry knowledge, operations, revenue size and scope | • | Rationale: Provides market data on companies that are similar to us in terms of revenue size and that represent employment alternatives for some executives outside of the industry | |||||
• | Companies included are: | • | Companies included are: | • | Companies included are: | |||||
| ¾ Diamond Offshore Drilling, Inc. | ¾ Baker Hughes Inc. | ¾ ACCO Brands Corporation | ||||||||
| ¾ ENSCO International, Inc. | ¾ BJ Services Company | ¾ Albemarle Corporation | ||||||||
| ¾ GlobalSantaFe Corp. | ¾ Cabot Oil & Gas Corporation | ¾ Allergan, Inc. | ||||||||
| ¾ Helmerich & Payne, Inc. | ¾ Cameron International | ¾ Ametek, Inc. | ||||||||
| ¾ Nabors Industries Ltd. | Corporation | ¾ Arch Chemicals, Inc. | ||||||||
| ¾ Pride International, Inc. | ¾ Chicago Bridge & Iron Company | ¾ Brady Corporation | ||||||||
| ¾ Rowan Companies, Inc. | ¾ Cimarex Energy Company | ¾ Chaparral Steel Company | ||||||||
| ¾ Transocean, Inc. | ¾ El Paso Corporation | ¾ Church & Dwight Company, Inc. | ||||||||
| ¾ Equitable Resources, Inc. | ¾ Cleco Corporation | |||||||||
| ¾ FMC Technologies Inc. | ¾ Curtiss-Wright Corporation | |||||||||
| ¾ Forest Oil Corporation | ¾ Donaldson Company, Inc. | |||||||||
| ¾ Noble Energy, Inc. | ¾ Equifax Inc. | |||||||||
| ¾ Pioneer Natural Resources | ¾ Herman Miller, Inc. | |||||||||
| Company | ¾ Joy Global Inc. | |||||||||
| ¾ Plains Exploration & | ¾ Kaman Corporation | |||||||||
| Production Company | ¾ Kennametal Inc. | |||||||||
| ¾ Schlumberger Ltd. | ¾ Kinetic Concepts Inc. | |||||||||
| ¾ Southwestern Energy Company | ¾ Martin Marietta Materials, Inc. | |||||||||
| ¾ St. Mary Land & Exploration | ¾ PolyOne Corporation | |||||||||
| Company | ¾ The Scotts Miracle-Gro Company | |||||||||
| ¾ Steelcase Inc. | ||||||||||
| ¾ Thomas & Betts Corporation | ||||||||||
| ¾ Vulcan Materials Company | ||||||||||
| ¾ W. R. Grace & Company | ||||||||||
| ¾ Walter Industries, Inc. | ||||||||||
| ¾ Woodward Governor Company | ||||||||||
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The elements
| Compensation Program | ||||||||||
| Component | Structure/Rationale | Objectives | ||||||||
| Salary | • | Salary for the named executive officers is reviewed and set annually based on market practices observed within the Direct Peer and Broad Energy Peer Groups in particular. | • | We generally target salary levels between the 50th and 75th percentile of the Direct and Broad Energy Peer Groups with high performing named executive officers approximating the 75th percentile. | ||||||
| • | Salary levels and adjustments to salary take into account our executives’ responsibilities, | |||||||||
| individual performance and internal equity within the Company. | • | Based on our review of market data provided by Hewitt, the named | ||||||||
| • | This component of pay is generally used to attract, retain and motivate executives. | executive officers’ pay levels for 2007 are consistent with our philosophy. | ||||||||
| Short-term incentives awarded under the Noble Corporation Short Term Incentive Plan (“STIP”) | • | Given the emphasis we and the compensation committee place on performance-based compensation, annual incentive targets are set above the energy market 50th percentile. | • | Bonus targets are set annually to correspond generally with the market 75th percentile of the Direct and Broad Energy Peer Groups. | ||||||
| • | This structure allows for a total cash compensation opportunity (base salary, plus short-term incentive awards) at or above the energy market 50th percentile commensurate with performance. | • | The Company’s goal is for the total cash compensation opportunity for each named executive officer to be between the 50th and 75th percentile of the Direct and Broad Energy Peer Groups, if the performance of the named executive officer warrants. | |||||||
| • | This program encourages and rewards achievement of annual financial and operational | |||||||||
| performance and individual goals and objectives. | • | The named executive officers’ pay levels for 2007 are consistent with our philosophy. | ||||||||
| Long-term incentives awarded pursuant to the Noble Corporation 1991 Stock Option and Restricted Stock Plan, as amended (the “1991 Plan”) | • | Awards are provided to executive officers on the basis of market compensation data as well as the executive officers’ responsibility and ability to influence the management and growth of the Company. | • | Given the design as described further below, award levels are set to correspond generally with the Direct and Broad Energy Peer Groups’ 75th percentile level. | ||||||
| • | Grants and awards of long-term incentives ensure a longer term focus and facilitate share ownership for named executive officers. | • | The named executive officers’ pay levels for 2007 are consistent with our philosophy. | |||||||
| • | Our long-term incentives consist of: | |||||||||
| — | Performance-vested restricted share awards designed to reward relative total member (shareholder) return versus industry comparators, | |||||||||
| — | Time-vested restricted share awards which facilitate retention of the named executive officer and a focus on longer term share price appreciation, and | |||||||||
| — | Stock option grants that are designed to reward absolute share price appreciation. | |||||||||
| • | Although infrequently used for named executive officers, we and the compensation committee have the ability to grant additional stock options and time-vested Restricted Shares based on specific situations including new hire awards, retention and motivation needs. | |||||||||
15
| Compensation Program | ||||||||||
| Component | Structure/Rationale | Objectives | ||||||||
| Retirement and Other Benefits | Our retirement programs provide retirement income benefits to their participants. These retirement programs and certain other benefits are discussed in further detail under the caption “Retirement and Other Benefits.” | The Company believes that these programs and benefits assist in maintaining a competitive position in terms of attracting and retaining officers and other employees. | ||||||||
| Change of Control | We enter into these agreements with our named | The Company believes that these | ||||||||
| Employment Agreements | executive officers and certain other key employees in an effort to attract and retain executive talent and to ensure their actions align with the interests of the Company and its members in the event of a change of control. These agreements are discussed in further detail under the caption “Potential Payments on Termination or Change of Control — Change of Control Employment Agreements.” | agreements assist in maintaining a competitive position in terms of attracting and retaining officers and other key employees. | ||||||||
Base Salaries
The base salaries forDirect Peer Group, the compensation committee benchmarked compensation by (i) ranking our named executive officers in relation to total compensation paid and comparing the named executive officers to individuals comparably ranked in companies included in the Direct Peer Group and (ii) comparing compensation of the named executive officers to the compensation of individuals in like positions in the companies included in the Direct Peer Group, where sufficient data for such a comparison were available. When targeting a percentile of the Broad Energy Peer Group, the compensation committee benchmarked compensation of the named executive officers to like positions in the companies included in the Broad Energy Peer Group. Although the compensation committee generally does not target compensation for the named executive officers to correspond with a percentile level of the General Industry Peer Group, data from this peer group are reviewed annuallyused by our compensation committee to monitor general market trends in compensation.
16
Annual Incentives
Noble’s Short Term Incentive Plan (“STIP”) is a goal-driven plan that
12
base salary for the lowest eligible participant to 75 percent for the Chief Executive Officer. Depending on actual performance measured against the performance goals set by the Committee, STIP awards can range from zero to 150100 percent of base salary, with the latter target award generally set for our Chief Executive Officer. Since neither Mr. Jackson, our former Chairman of the Board, Chief Executive Officer and President, nor Mr. Sears, our interim Chairman of the Board, Chief Executive Officer and President, was employed through the date on which the 2007 STIP award payments were made, the target awards for the CEOnamed executive officers who were eligible to participate in the STIP for the 2007 plan year were 55 percent or up to 11075 percent of base salary for other executive officers.
salary. For each participant, a portion of the total STIP award is based on the achievement of performance goals (“Performance Bonus”) and the remaining portion of the STIP award is available at the discretion of the compensation committee based on merit, individual and team performance and additional selected criteria (“Discretionary Bonus”). The Committeecompensation committee sets performance goals annually for the STIP.plan.
Fifty percentalso believes that its goal of the bonus calculation for allachieving cooperation between corporate employees and division employees is based onachieved by including cash operating margin as a performance goal component.
17
compensation committee. The Company hasDiscretionary Bonuses for the 2007 plan year paid a bonus underto the termsnamed executive officers are included in the Bonus column of the STIPSummary Compensation Table.
STIP.
It has been a longstanding objective of the Company to reward executive officers and key employees with equity compensation, in keeping with the overall compensation philosophy to further instillalign executives’ and employees’ interests with the interests of our members. We believe long-term incentives promote sustained member (shareholder) perspective and valuesvalue by encouraging named executive officers to accomplish goals that benefit the Company both in the actions of employeespresent and executive officers.over a longer time period.
18
| • | First, the percentile ranking of the TSR for Ordinary Shares is computed relative to the companies in the DJ Index at the end of the performance cycle. | ||
| • | Second, the DJ Index percentile ranking is cross-referenced in the table below to determine the percentage of performance-vested Restricted Shares allotted to the DJ Index performance measure that vest for the 2007-2009 performance cycle. |
| TSR for Ordinary Shares | Percentage of Restricted | |||||
| Relative to the DJ Index | Shares Vesting (1) | |||||
90%tile and greater | (maximum) | 100.0 | % | |||
| 85 %tile | 88.7 | % | ||||
| 80 %tile | 78.0 | % | ||||
| 75 %tile | (target) | 66.7 | % | |||
| 70 %tile | 62.0 | % | ||||
| 65 %tile | 57.3 | % | ||||
| 60 %tile | 52.7 | % | ||||
| 55 %tile | 47.3 | % | ||||
| 50 %tile | 42.7 | % | ||||
| 45 %tile | 38.0 | % | ||||
| 40 %tile | (threshold) | 33.3 | % | |||
| Below 40 %tile | 0 | % | ||||
| (1) | Values between those listed are interpolated on a straight line basis. Each percentage represents a percentage of one-half of the total number of Restricted Shares awarded for the maximum level of performance for the 2007-2009 performance cycle. |
| • | Third, the percentile ranking of the TSR for Ordinary Shares is computed relative to the companies in the Direct Peer Group at the end of the performance cycle. | ||
| • | Fourth, the Direct Peer Group percentile ranking is cross-referenced in the table below to determine the percentage of performance-vested Restricted Shares allotted to the Direct Peer Group performance measure that vest for the 2007-2009 performance cycle. |
19
| TSR for Ordinary Shares | Percentage of Restricted | |||||
| Relative to the Direct Peer Group | Shares Vesting (1) | |||||
| 100 %tile | (maximum) | 100 | % | |||
| 87.5 %tile | 94.4 | % | ||||
| 75 %tile | (target) | 67.7 | % | |||
| 62.5 %tile | 54.7 | % | ||||
| 50 %tile | 42.7 | % | ||||
| 37.5 %tile | (threshold) | 28.0 | % | |||
| Below 35 %tile | 0 | % | ||||
| (1) | Values between those listed are interpolated on a straight line basis. Each percentage represents a percentage of one-half of the total number of Restricted Shares awarded for the maximum level of performance for the 2007-2009 performance cycle. |
20
Board, Chief Executive Officer Compensation
The CEO’sand President of the Company on an interim basis from September 20, 2007 to January 2, 2008. During his term as an officer of the Company, Mr. Sears received an annual base salary is reviewed annually, consistentat the rate of $850,000. Mr. Sears’ base salary was set to correspond with the Company’s salary administration policy for all shore-based employees. The CEO participatesDirect and Broad Energy Peer Group’s 75th percentile because of his background and considerable industry experience. During his term of office, Mr. Sears did not participate in any of our retirement programs or other employee benefit programs.
Effective February 1, 2004, the CEO’s annual salary was increased to $900,000. The CEO currently receives approximately 14 percent of his base salary in the form of Ordinary Shares as a result of the CEO’s request to have certain previous base salary increases paid in the form of the Company’s equity.
13
In accordance with the terms of the STIP,award upon the CEOresignation of Mr. Sears as an officer of the Company on January 2, 2008. On February 8, 2008, our Board awarded 6,060 unrestricted Ordinary Shares to Mr. Sears under the 1992 Plan in recognition of the 6,060 shares that would have been awarded to Mr. Sears on October 25, 2007 had he chosen not to serve the Company as interim Chairman of the Board, Chief Executive Officer and President and continued to serve as a non-employee director. Also on February 8, 2008, upon the recommendation of the compensation committee, our Board authorized and approved a payment to Mr. Sears of $85,480. The compensation committee determined to recommend this payment in recognition of Mr. Sears’ service as interim Chairman of the Board, Chief Executive Officer and President of the Company from September 20, 2007 to January 2, 2008 (“Mr. Sears’ period of service”) and the forfeiture of 17,021 time-vested Restricted Shares. The $85,480 amount represented the dollar value of the 17,021 time-vested Restricted Shares awarded on October 25, 2007 (and forfeited on January 2, 2008) prorated over Mr. Sears’ period of service. Mr. Sears subsequently requested that the Company reconsider the compensation committee’s recommendation of the payment of $85,480 and that our Board authorize and approve a payment that represents the current market value of 17,021 Ordinary Shares. The compensation committee determined not to recommend an additional payment.
21
22
| Ownership Guidelines | ||
| Pay Grade Level | (Multiple of Base Salary) | |
| Pay Grade 37 | 5.0 times | |
| Pay Grades 34 through 36 | 4.0 times | |
| Pay Grades 31 through 33 | 3.5 times | |
| Pay Grades 28 through 30 | 2.5 times | |
| Pay Grade 27 | 2.0 times | |
| Pay Grade 26 | 1.5 times |
23
Tax Deductibility of Executive Compensation
from 66 percent to 80 percent.
24
| March | COMPENSATION COMMITTEE | |||
Michael A. Cawley, Chair Luke R. Corbett Marc E. Leland | ||||
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| Long-Term Compensation Awards | ||||||||||||||||||||||||||||||||
| Value of | ||||||||||||||||||||||||||||||||
| Annual Compensation | Securities | Long | ||||||||||||||||||||||||||||||
| Other | Underlying | Term | All | |||||||||||||||||||||||||||||
| Annual | Restricted | Options | Incentive | Other | ||||||||||||||||||||||||||||
| Name and | Compen | Stock | (number of | Plan Pay- | Compen | |||||||||||||||||||||||||||
| Principal Position | Year | Salary | Bonus | -sation | Awards(1) | shares) (2) | Outs | -sation | ||||||||||||||||||||||||
| James C. Day | 2004 | $ | 889,583 | $ | 1,072,500 | $ | 8,784 | $ | 3,713,000 | 50,000 | $ | 0 | $ | 24,357 | (3) | |||||||||||||||||
Chairman,Chief Executive | 2003 | $ | 775,000 | $ | 550,000 | $ | 7,818 | $ | 0 | 0 | $ | 2,036,520 | $ | 19,448 | ||||||||||||||||||
| Officer and President | 2002 | $ | 775,000 | $ | 913,750 | $ | 7,855 | $ | 0 | 180,000 | $ | 2,274,211 | $ | 15,374 | ||||||||||||||||||
| Mark A. Jackson | 2004 | $ | 360,417 | $ | 325,000 | $ | 0 | $ | 1,412,314 | 18,407 | $ | 0 | $ | 9,853 | (4) | |||||||||||||||||
| Chief Operating Officer, Senior | 2003 | $ | 310,000 | $ | 200,000 | $ | 0 | $ | 0 | 0 | $ | 281,090 | $ | 8,400 | ||||||||||||||||||
| Vice President, Chief Financial | 2002 | $ | 310,000 | $ | 280,000 | $ | 0 | $ | 0 | 75,000 | $ | 253,840 | $ | 8,400 | ||||||||||||||||||
| Officer | ||||||||||||||||||||||||||||||||
| Danny W. Adkins | 2004 | $ | 273,333 | $ | 275,000 | $ | 0 | $ | 523,904 | 8,998 | $ | 0 | $ | 10,177 | (4) | |||||||||||||||||
| Senior Vice President – | 2003 | $ | 255,000 | $ | 125,000 | $ | 0 | $ | 0 | 0 | $ | 736,368 | $ | 8,459 | ||||||||||||||||||
| Operations, Noble Drilling | 2002 | $ | 255,000 | $ | 280,000 | $ | 0 | $ | 0 | 75,000 | $ | 752,985 | $ | 8,400 | ||||||||||||||||||
| Corporation | ||||||||||||||||||||||||||||||||
| Julie J. Robertson | 2004 | $ | 282,083 | $ | 275,000 | $ | 0 | $ | 523,904 | 8,998 | $ | 0 | $ | 15,971 | (4) | |||||||||||||||||
| Senior Vice President – | 2003 | $ | 250,000 | $ | 125,000 | $ | 0 | $ | 0 | 0 | $ | 662,400 | $ | 12,000 | ||||||||||||||||||
| Administration and | 2002 | $ | 250,000 | $ | 280,000 | $ | 0 | $ | 0 | 75,000 | $ | 682,933 | $ | 11,000 | ||||||||||||||||||
| Corporate Secretary | ||||||||||||||||||||||||||||||||
| Change in | ||||||||||||||||||||||||||||||||||||
| Pension Value | ||||||||||||||||||||||||||||||||||||
| and Non- | ||||||||||||||||||||||||||||||||||||
| Non-Equity | Qualified | |||||||||||||||||||||||||||||||||||
| Incentive | Deferred | |||||||||||||||||||||||||||||||||||
| Plan | Compen- | |||||||||||||||||||||||||||||||||||
| Name and Principal | Stock | Option | Compen- | sation | All Other | |||||||||||||||||||||||||||||||
| Position | Year | Salary | Bonus (1) | Awards (2) | Awards (2) | sation (1) | Earnings (3) | Compensation | Total | |||||||||||||||||||||||||||
| David W. Williams | 2007 | $ | 489,583 | $ | 375,000 | $ | 1,589,245 | $ | 394,841 | $ | 262,500 | $ | 0 | $ | 24,756 | (4) | $ | 3,135,925 | ||||||||||||||||||
| Chairman of the Board, Chief Executive Officer and President, and former Senior Vice President and Chief Operating Officer (4) | ||||||||||||||||||||||||||||||||||||
| Julie J. Robertson | 2007 | $ | 422,917 | $ | 468,750 | (5) | $ | 962,091 | $ | 314,976 | $ | 223,125 | $ | 165,017 | $ | 20,471 | (5) | $ | 2,577,347 | |||||||||||||||||
| Executive Vice | 2006 | $ | 397,083 | $ | 297,500 | $ | 675,418 | $ | 248,218 | $ | 262,500 | $ | 154,292 | $ | 18,896 | $ | 2,053,907 | |||||||||||||||||||
| President and Corporate Secretary | ||||||||||||||||||||||||||||||||||||
| Thomas L. Mitchell | 2007 | $ | 400,000 | $ | 240,000 | $ | 1,305,691 | $ | 336,446 | $ | 210,000 | $ | 0 | $ | 33,094 | (6) | $ | 2,525,231 | ||||||||||||||||||
| Senior Vice President, | 2006 | $ | 62,885 | $ | 100,000 | (6) | $ | 143,903 | $ | 40,106 | $ | 0 | $ | 0 | $ | 4,824 | $ | 351,718 | ||||||||||||||||||
| Chief Financial Officer, Treasurer and Controller (6) | ||||||||||||||||||||||||||||||||||||
| Robert D. Campbell | 2007 | $ | 313,750 | $ | 128,725 | $ | 410,450 | $ | 131,238 | $ | 121,275 | $ | 51,910 | $ | 18,137 | (7) | $ | 1,175,485 | ||||||||||||||||||
| Senior Vice President and | 2006 | $ | 299,167 | $ | 155,625 | $ | 374,623 | $ | 104,421 | $ | 144,375 | $ | 88,493 | $ | 13,238 | $ | 1,179,942 | |||||||||||||||||||
| General Counsel | ||||||||||||||||||||||||||||||||||||
| William A. Sears | 2007 | $ | 234,159 | $ | 407,767 | (8) | $ | 224,443 | $ | 0 | $ | 0 | $ | 0 | $ | 25,312 | (8) | $ | 891,681 | |||||||||||||||||
| Former Chairman of the Board, Chief Executive Officer and President (8) | ||||||||||||||||||||||||||||||||||||
| James C. Day | 2007 | $ | 358,325 | (9) | $ | 0 | $ | 1,854,645 | $ | 1,168,320 | $ | 0 | $ | 0 | $ | 18,732 | (9) | $ | 3,400,022 | |||||||||||||||||
| Former Chairman of the Board (9) | 2006 | $ | 946,735 | (9) | $ | 948,750 | $ | 2,546,561 | $ | 858,904 | $ | 831,250 | $ | 1,125,171 | $ | 70,089 | $ | 7,327,460 | ||||||||||||||||||
| Mark A. Jackson | 2007 | $ | 595,693 | (10) | $ | 0 | $ | 1,960,452 | $ | 1,321,690 | $ | 0 | $ | 151,035 | $ | 1,431,338 | (10) | $ | 5,460,208 | |||||||||||||||||
| Former Chairman of the Board, | 2006 | $ | 604,367 | (10) | $ | 679,375 | $ | 1,060,749 | $ | 395,957 | $ | 590,625 | $ | 108,415 | $ | 16,293 | $ | 3,455,781 | ||||||||||||||||||
| Chief Executive Officer and President (10) | ||||||||||||||||||||||||||||||||||||
| (1) | ||
| (2) |
26
| an officer on an interim basis, his service period for purposes of determining the dollar amount recognized in accordance with SFAS No. 123R was 366 days and not the three-year vesting period under his award. Effective February 13, 2007, the following performance-vested Restricted Shares | ||
| (3) | ||
| (4) | On January 2, 2008, Mr. Williams was appointed as Chairman of the Board, Chief Executive Officer and President of the Company. Compensation amounts for the full year are reflected in this Summary Compensation Table, including the period prior to April 25, 2007, which is the date that Mr. Williams became an executive officer of the Company. The amount in All Other Compensation includes $10,850 in Company contributions to the Noble Drilling Corporation 401(k) Savings Plan and the Noble Drilling Corporation 401(k) Savings Restoration Plan and $12,678, which represents dividends paid by the Company in 2007 on Restricted Shares held by Mr. Williams. | |
| (5) | The amount in Bonus includes a discretionary cash bonus of $150,000 awarded to Ms. Robertson on October 25, 2007. This bonus was not awarded pursuant to the STIP. The amount in All Other Compensation includes $15,500 in Company contributions to the Noble Drilling Corporation 401(k) Savings Plan and the Noble Drilling Corporation 401(k) Savings Restoration Plan. | |
| (6) | Mr. Mitchell joined the Company as Senior Vice President, Chief Financial Officer, Treasurer and Controller effective November 6, 2006. For 2006, the amount in Bonus consists of | |
| (7) | The amount in All Other Compensation includes $15,500 in Company contributions to the Noble Drilling Corporation 401(k) Savings Plan and the Noble Drilling Corporation 401(k) Savings Restoration Plan. | |
| (8) | Mr. Sears served as Chairman of the Board, Chief Executive Officer and President of the Company on an interim basis from September 20, 2007 to January 2, 2008. The compensation amounts for services performed by Mr. Sears as an officer of the Company from September 20, 2007 to December 31, 2007 are reflected in this Summary Compensation Table. The amount in Bonus includes a discretionary cash bonus of $407,767 awarded to Mr. Sears on February 8, 2008, which represents the amount that Mr. Sears would have been awarded pursuant to the 2007 STIP had he continued to be employed through the date on which the 2007 STIP award payments were made. The amount in All Other Compensation includes $13,400 in housing expenses paid by the Company and $10,989 in tax reimbursement paid by the Company, which represents the amount of taxes due on the amount reimbursed to Mr. Sears for his housing expenses. | |
| (9) | Effective April 30, 2007, Mr. Day retired from the Company and our Board. For 2007, the amount in Salary includes $58,333 that was deferred in the form of Ordinary Shares pursuant to the Noble Drilling Corporation 401(k) Savings Restoration Plan and $300 in director’s fees. For 2006, the amount in Salary includes $175,000 that was deferred in the form of Ordinary Shares pursuant to the Noble Drilling Corporation 401(k) Savings Restoration Plan and $900 in director’s fees. For 2007, the amount in All Other Compensation includes |
1527
| $15,500 in Company contributions to the Noble Drilling Corporation 401(k) Savings Plan and the Noble Drilling Corporation 401(k) Savings Restoration Plan. | ||
| (10) | Effective September 20, 2007, Mr. Jackson resigned his positions as Chairman of the Board, Chief Executive Officer, President and a director of the Company. The amount in Salary includes $500 and $200 in director’s fees for the years ended December 31, 2007 and 2006, respectively. For 2007, the amount in All Other Compensation includes $1,312,500 paid pursuant to a separation agreement and release entered into by the Company and Mr. Jackson. This agreement is further described in this proxy statement under the caption “Potential Payments on Termination or Change of Control – Separation Agreement and Release.” For 2007, the amount in All Other Compensation also includes: $11,904 in Company contributions to the Noble Drilling Corporation 401(k) Savings Plan and the Noble Drilling Corporation 401(k) Savings Restoration Plan; $85,000, which represents the amount by which matching charitable contributions by the Company under the Noble Corporation Matching Gift Program exceeded the $15,000 annual maximum limit available to all employees for such contributions under the program; air travel and hotel expenses paid by the Company in connection with family members accompanying Mr. Jackson on business trips; and the incremental cost to the Company for the use of Company aircraft. |
28
O
| All | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Individual Grants | Stock | All Other | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Number of | Awards: | Option | Grant | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Securities | Percent of | Estimated Possible Payouts | Estimated Future Payouts | Number | Awards: | Exercise | Date Fair | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Underlying | Total | Potential Realizable Value at | Under Non-Equity Incentive | Under Equity Incentive | of | Number of | or Base | Value of | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Options/SARS | Options/SARS | Exercise | Assumed Annual Rates of Stock | Plan Awards (1) | Plan Awards (2) | Shares | Securities | Price of | Stock and | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Granted | Granted to | Price | Price Appreciation for | Maxi- | Maxi- | of Stock | Underlying | Option | Option | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (number of | Employees | Per | Option Term (1) | Grant | Thresh | Target | mum | Thresh | Target | mum | or Units | Options (#) | Awards | Awards | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Name | shares) | In 2004 | Share | Expiration Date | 5% (2) | 10% (2) | Date | -old ($) | ($) | ($) | -old (#) | (#) | (#) | (#) (3) | (4) | ($/Sh) (4) | (5) | |||||||||||||||||||||||||||||||||||||||||||||||||
| David W. Williams | February 13 | — | — | — | 0 | 53,189 | 79,150 | — | — | — | $ | 1,078,722 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| February 13 | — | — | — | — | — | — | 20,118 | — | — | $ | 720,023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| February 13 | — | — | — | — | — | — | — | 27,460 | $ | 35.79 | $ | 360,001 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| — | $ | 0 | $ | 187,500 | $ | 375,000 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Julie J. Robertson | February 13 | — | — | — | 0 | 44,324 | 65,958 | — | — | — | $ | 898,931 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| February 13 | — | — | — | — | — | — | 16,764 | — | — | $ | 599,984 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| February 13 | — | — | — | — | — | — | — | 22,884 | $ | 35.79 | $ | 300,009 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| — | $ | 0 | $ | 159,375 | $ | 318,750 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Thomas L. Mitchell | February 13 | — | — | — | 0 | 35,459 | 52,766 | — | — | — | $ | 719,139 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| February 13 | — | — | — | — | — | — | 13,412 | — | — | $ | 480,015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| February 13 | — | — | — | — | — | — | — | 18,306 | $ | 35.79 | $ | 239,992 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| — | $ | 0 | $ | 150,000 | $ | 300,000 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Robert D. Campbell | February 13 | — | — | — | 0 | 19,207 | 28,582 | — | — | — | $ | 389,539 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| February 13 | — | — | — | — | — | — | 7,264 | — | — | $ | 259,979 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| February 13 | — | — | — | — | — | — | — | 9,916 | $ | 35.79 | $ | 129,999 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| — | $ | 0 | $ | 86,625 | $ | 173,250 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| William A. Sears | October 25 | — | — | — | — | — | — | 23,081 | — | — | $ | 1,226,063 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| James C. Day | 50,000 | (3) | 17.9 | % | $ | 37.57 | April 19, 2014 | $ | 1,181,500 | $ | 2,994,000 | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Mark A. Jackson | 18,407 | (3) | 6.6 | % | $ | 37.57 | April 19, 2014 | $ | 434,957 | $ | 1,102,211 | February 13 | — | — | — | 0 | 106,378 | 158,300 | — | — | — | $ | 2,157,444 | |||||||||||||||||||||||||||||||||||||||||||
| Danny W. Adkins | 8,998 | (3) | 3.2 | % | $ | 37.57 | April 19, 2014 | $ | 212,623 | $ | 538,800 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Julie J. Robertson | 8,998 | (3) | 3.2 | % | $ | 37.57 | April 19, 2014 | $ | 212,623 | $ | 538,800 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| February 13 | — | — | — | — | — | — | 40,234 | — | — | $ | 1,439,975 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| February 13 | — | — | — | — | — | — | — | 54,920 | $ | 35.79 | $ | 720,001 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (1) | ||
| (2) | ||
| (3) | Represents time-vested Restricted Shares awarded during the year ended December 31, 2007 pursuant to the 1991 Plan. | |
| (4) | Represents nonqualified stock options granted during the year ended December 31, 2007 pursuant to the 1991 Plan. The exercise price for these nonqualified stock options of $35.79 represents the fair market value per share on the date of grant as specified in the 1991 Plan (average of the high and low prices of the Ordinary Shares). This exercise price is less than the closing market price on the date of grant, February 13, 2007, of $35.825. | |
| (5) | Represents the aggregate grant date fair value of the award computed in accordance with SFAS No. 123R. |
29
| Option Awards (1) | Stock Awards | |||||||||||||||||||||||||||||||
| Equity | Equity | |||||||||||||||||||||||||||||||
| Incentive | Incentive Plan | |||||||||||||||||||||||||||||||
| Market | Plan | Awards: | ||||||||||||||||||||||||||||||
| Value of | Awards: | Market or | ||||||||||||||||||||||||||||||
| Number of | Shares or | Number of | Payout Value | |||||||||||||||||||||||||||||
| Number of | Number of | Shares or | Units of | Unearned | of Unearned | |||||||||||||||||||||||||||
| Securities | Securities | Units of | Stock | Shares, Units | Shares, Units | |||||||||||||||||||||||||||
| Underlying | Underlying | Stock That | That | or Other | or Other | |||||||||||||||||||||||||||
| Unexercised | Unexercised | Option | Have Not | Have Not | Rights That | Rights That | ||||||||||||||||||||||||||
| Options (#) | Options (#) | Exercise | Option | Vested (#) | Vested ($) | Have Not | Have Not | |||||||||||||||||||||||||
| Name | Exercisable | Unexercisable | Price ($) | Expiration Date | (2) | (3) | Vested (#) (4) | Vested ($) (3) | ||||||||||||||||||||||||
| David W. Williams | — | 27,460 | (5) | $ | 35.79 | February 13, 2017 | 86,785 | (6) | $ | 4,904,220 | 53,189 | (7) | $ | 3,005,710 | ||||||||||||||||||
| 33,333 | 66,667 | (8) | $ | 31.505 | September 20, 2016 | — | — | — | — | |||||||||||||||||||||||
| Julie J. Robertson | — | 22,884 | (5) | $ | 35.79 | February 13, 2017 | 30,236 | (9) | $ | 1,708,636 | 76,580 | (10) | $ | 4,327,536 | ||||||||||||||||||
| 7,916 | 15,836 | (11) | $ | 37.925 | February 2, 2016 | — | — | — | — | |||||||||||||||||||||||
| 22,666 | 11,334 | (12) | $ | 26.46 | April 27, 2015 | — | — | — | — | |||||||||||||||||||||||
| 17,996 | — | $ | 18.78 | April 20, 2014 | — | — | — | — | ||||||||||||||||||||||||
| 150,000 | — | $ | 15.60 | July 25, 2012 | — | — | — | — | ||||||||||||||||||||||||
| 100,000 | — | $ | 15.55 | July 26, 2011 | — | — | — | — | ||||||||||||||||||||||||
| 100,000 | — | $ | 21.205 | October 26, 2010 | — | — | — | — | ||||||||||||||||||||||||
| 90,000 | — | $ | 10.72 | October 28, 2009 | — | — | — | — | ||||||||||||||||||||||||
| 90,000 | — | $ | 7.8125 | October 22, 2008 | — | — | — | — | ||||||||||||||||||||||||
| 40,000 | — | $ | 10.8125 | July 23, 2008 | — | — | — | — | ||||||||||||||||||||||||
| Thomas L. Mitchell | — | 18,306 | (5) | $ | 35.79 | February 13, 2017 | 66,746 | (13) | $ | 3,771,816 | 35,459 | (14) | $ | 2,003,788 | ||||||||||||||||||
| 26,666 | 53,334 | (15) | $ | 35.495 | November 6, 2016 | — | — | — | — | |||||||||||||||||||||||
| Robert D. Campbell | — | 9,916 | (5) | $ | 35.79 | February 13, 2017 | 12,640 | (16) | $ | 714,286 | 33,269 | (17) | $ | 1,880,031 | ||||||||||||||||||
| 0 | 4,186 | (11) | $ | 37.925 | February 2, 2016 | — | — | — | — | |||||||||||||||||||||||
| 0 | 6,200 | (12) | $ | 26.46 | April 27, 2015 | — | — | — | — | |||||||||||||||||||||||
| William A. Sears | 4,000 | — | $ | 41.25 | April 28, 2016 | 31,083 | (18) | $ | 1,756,500 | — | — | |||||||||||||||||||||
| 4,000 | — | $ | 26.62 | April 29, 2015 | — | — | — | — | ||||||||||||||||||||||||
| 15,000 | — | $ | 18.93 | April 23, 2014 | — | — | — | — | ||||||||||||||||||||||||
| 15,000 | — | $ | 16.055 | April 25, 2013 | — | — | — | — | ||||||||||||||||||||||||
| 15,000 | — | $ | 21.34 | April 26, 2012 | — | — | — | — | ||||||||||||||||||||||||
| 10,000 | — | $ | 23.845 | April 27, 2011 | — | — | — | — | ||||||||||||||||||||||||
| 7,000 | — | $ | 18.360 | April 28, 2010 | — | — | — | — | ||||||||||||||||||||||||
| 7,000 | — | $ | 8.913 | April 24, 2009 | — | — | — | — | ||||||||||||||||||||||||
| 20,000 | — | $ | 16.25 | April 24, 2008 | — | — | — | — | ||||||||||||||||||||||||
| James C. Day | 71,152 | — | $ | 37.925 | April 30, 2012 | — | — | 63,870 | (19) | $ | 3,609,294 | |||||||||||||||||||||
| 102,800 | — | $ | 26.46 | April 30, 2012 | — | — | — | — | ||||||||||||||||||||||||
| 100,000 | — | $ | 18.78 | April 30, 2012 | — | — | — | — | ||||||||||||||||||||||||
| 116,400 | — | $ | 15.60 | April 30, 2012 | — | — | — | — | ||||||||||||||||||||||||
| Mark A. Jackson | 54,920 | — | $ | 35.79 | March 20, 2008 | — | — | — | — | |||||||||||||||||||||||
| 7,240 | — | $ | 41.10 | March 20, 2008 | — | — | — | — | ||||||||||||||||||||||||
| 31,390 | — | $ | 37.925 | March 20, 2008 | — | — | — | — | ||||||||||||||||||||||||
| 42,672 | — | $ | 26.46 | March 20, 2008 | — | — | — | — | ||||||||||||||||||||||||
| 25,000 | — | $ | 24.405 | March 20, 2008 | — | — | — | — | ||||||||||||||||||||||||
| (1) | For each named executive officer (except Mr. Sears), represents nonqualified stock options granted pursuant to the 1991 Plan. For Mr. Sears, represents nonqualified stock options granted pursuant to the 1992 Plan. | |
| (2) | Except as otherwise noted, the numbers in this column represent | |
| (3) | The market value was computed by multiplying the closing market price of | |
| (4) | The numbers in this column represent performance-vested Restricted Shares and are calculated based on |
30
| (5) | One-third of the options | |
| (6) | Of these shares, 6,706 vested on February 13, 2008; 33,333 will vest on September 20, 2008; 6,706 will vest on February 13, 2009; 33,334 will vest on September 20, 2009; and 6,706 will vest on February 13, 2010. | |
| (7) | Consists of 53,189 performance-vested Restricted Shares that will vest, if at all, based on the applicable performance measure over the 2007-2009 performance cycle. | |
| (8) | One-third of the options granted became exercisable on September 20, 2007. An additional one-third of the options become exercisable on each of September 20, 2008 and 2009. | |
| (9) | Of these shares, 3,736 vested on February 2, 2008; 5,588 vested on February 13, 2008; 6,000 will vest on April 27, 2008; 3,736 will vest on February 2, 2009; 5,588 will vest on February 13, 2009; and 5,588 will vest on February 13, 2010. | |
| (10) | Includes 44,324 and 13,856 performance-vested Restricted Shares that will vest, if at all, based on the applicable performance measure over the 2007-2009 performance cycle and the 2006-2008 performance cycle, respectively. Also includes 18,400 performance-vested Restricted Shares for the 2005-2007 performance cycle of which, effective February 7, 2008, 15,586 shares vested and the remaining shares for such performance cycle were forfeited. | |
| (11) | One-third of the options granted became exercisable on each of February 2, 2007 and 2008. The remaining one-third of the options granted become exercisable on February 2, 2009. | |
| (12) | One-third of the options granted became exercisable on each of April | |
| (13) | Of these shares, 4,470 vested on February 13, 2008; 26,667 will vest on November 6, 2008; 4,471 will vest on February 13, 2009; 26,667 will vest on November 6, 2009; and 4,471 will vest on February 13, 2010. | |
| (14) | Consists of 35,459 performance-vested Restricted Shares that will vest, if at all, based on the applicable performance measure over the 2007-2009 performance cycle. | |
| (15) | One-third of the options granted became exercisable on November 6, 2007. An additional one-third of the options become exercisable on each of November 6, 2008 and 2009. | |
| (16) | Of these shares, 988 vested on February 2, 2008 and 2,421 vested on February 13, 2008; 3,400 will vest on April 27, 2008; 988 will vest on February 2, 2009; 2,421 will vest on February 13, 2009; and 2,422 will vest on February 13, 2010. | |
| (17) | Includes 19,207 and 3,662 performance-vested Restricted Shares that will vest, if at all, based on the applicable performance measure over the 2007-2009 performance cycle and the 2006-2008 performance cycle, respectively. Also includes 10,400 performance-vested Restricted Shares for the 2005-2007 performance cycle of which, effective February 7, 2008, 8,809 shares vested and the remaining shares for such performance cycle were forfeited. | |
| (18) | Of these shares, 23,081 were awarded on October 25, 2007 pursuant to the 1991 Plan and were later forfeited in accordance with the terms of the award agreement for these shares upon the resignation of Mr. Sears as an officer of the Company on January 2, 2008. The remaining 8,002 shares were awarded under the 1992 Plan and, of these shares, 2,667 will vest on April 28, 2008; 2,668 will vest on April 29, 2008; and 2,667 will be forfeited on the date of Mr. Sears’ retirement from our Board unless our Board, in its discretion, determines to remove the restrictions on vesting. | |
| (19) | Includes 18,447 performance-vested Restricted Shares that will vest, if at all, based on the applicable performance measure over the 2006-2008 performance cycle. Also includes 45,423 performance-vested Restricted Shares for the 2005-2007 performance cycle of which, effective February 7, 2008, 38,475 shares vested and the remaining shares for such performance cycle were forfeited. |
31
| Option Awards (1) | Stock Awards (1) | |||||||||||||||
| Number of Shares | Number of Shares | Value Realized | ||||||||||||||
| Acquired on | Value Realized on | Acquired on | on Vesting | |||||||||||||
| Name | Exercise (#) | Exercise ($)(2) | Vesting (#)(3) | ($)(3) | ||||||||||||
| David W. Williams | — | — | 33,333 | $ | 1,648,317 | (4) | ||||||||||
| �� | ||||||||||||||||
| Julie J. Robertson | 120,000 | $ | 4,496,457 | 20,730 | $ | 813,211 | (5) | |||||||||
| Thomas L. Mitchell | — | — | 26,666 | $ | 1,502,362 | (6) | ||||||||||
| Robert D. Campbell | 432,584 | $ | 15,746,102 | 9,616 | $ | 380,671 | (7) | |||||||||
| William A. Sears | — | — | 5,332 | $ | 232,448 | (8) | ||||||||||
| James C. Day | 493,600 | $ | 15,955,833 | 145,086 | $ | 5,712,536 | (9) | |||||||||
| Mark A. Jackson | 140,000 | $ | 4,541,191 | 106,098 | $ | 4,769,595 | (10) | |||||||||
| (1) | Represents Restricted Share awards and non-qualified stock option grants under the 1991 Plan for each named executive officer, except for the amounts reported under the Stock Awards column for William A. Sears which represent shares acquired upon the vesting of restricted Ordinary Shares issued under the 1992 Plan. | |
| (2) | The value is based on the difference in the market price of the Ordinary Shares at the time of exercise and the exercise price of the options. | |
| (3) | The value is based on the closing market price of the Ordinary Shares on the vesting date multiplied by the aggregate number of shares that vested on such date. | |
| (4) | Vesting occurred on September 20, 2007. The closing market price per Ordinary Share on that date was $49.45. | |
| (5) | Of these shares, 3,736 shares vested on February 2, 2007, with a value of $141,520 (based on a closing market price per Ordinary Share of $37.88 on that date); 7,230 shares vested on February 13, 2007, with a value of $259,015 (based on a closing market price per Ordinary Share of $35.825 on that date); 3,764 shares vested on April 20, 2007, with a value of $151,106 (based on a closing market price per Ordinary Share of $40.145 on that date); and 6,000 shares vested on April 27, 2007, with a value of $261,570 (based on a closing market price per Ordinary Share of $43.595 on that date). | |
| (6) | Vesting occurred on November 6, 2007. The closing market price per Ordinary Share on that date was $56.34. | |
| (7) | Of these shares, 986 shares vested on February 2, 2007, with a value of $37,350 (based on a closing market price per Ordinary Share of $37.88 on that date); 3,440 shares vested on February 13, 2007, with a value of $123,238 (based on a closing market price per Ordinary Share of $35.825 on that date); 1,790 shares vested on April 20, 2007, with a value of $71,860 (based on a closing market price per Ordinary Share of $40.145 on that date); and 3,400 shares vested on April 27, 2007, with a value of $148,223 (based on a closing market price per Ordinary Share of $43.595 on that date). | |
| (8) | Of these shares, 2,666 shares vested on April 28, 2007, with a value of $116,224 (based on a closing market price per Ordinary Share of $43.595 on April 27, 2007); and 2,666 shares vested on April 29, 2007, with a value of $116,224 (based on a closing market price per Ordinary Share of $43.595 on April 27, 2007). |
AggregatedOption/SAR Exercisesin2004and12/31/04 Option/SAR Values
| Shares | ||||||||||||||||||||||||
| Acquired | Number of Securities | Value of Unexercised In-the- | ||||||||||||||||||||||
| on Exercise | Underlying Unexercised Options/SARs at | Money Options/SARs at | ||||||||||||||||||||||
| (number of | Value | 12/31/04 (shares) | 12/31/04 | |||||||||||||||||||||
| Name | shares) | Realized | Exercisable | Unexercisable | Exercisable | Unexercisable | ||||||||||||||||||
| James C. Day | 0 | 0 | 610,834 | 110,000 | $ | 11,202,465 | $ | 1,721,400 | ||||||||||||||||
| Mark A. Jackson | 45,000 | $ | 736,598 | 115,000 | 43,407 | $ | 811,350 | $ | 687,697 | |||||||||||||||
| Danny W. Adkins | 232,667 | $ | 4,451,338 | 80,000 | 33,998 | $ | 866,650 | $ | 573,096 | |||||||||||||||
| Julie J. Robertson | 0 | 0 | 342,000 | 33,998 | $ | 7,552,900 | $ | 573,096 | ||||||||||||||||
1632
Defined Benefit Plans
Our
| (9) | Of these shares, 11,192 shares vested on February 2, 2007, with a value of $423,953 (based on a closing market price per Ordinary Share of $37.88 on that date); 51,240 shares vested on February 13, 2007, with a value of $1,835,673 (based on a closing market price per Ordinary Share of $35.825 on that date); 26,668 shares vested on April 20, 2007, with a value of $1,070,587 (based on a closing market price per Ordinary Share of $40.145 on that date); 16,800 shares vested on April 27, 2007, with a value of $732,396 (based on a closing market price per Ordinary Share of $43.595 on that date); and 39,186 shares vested on April 30, 2007, with a value of $1,649,927 (based on a closing market price per Ordinary Share of $42.105 on that date). | |
| (10) | Of these shares, 4,938 shares vested on February 2, 2007, with a value of $187,051 (based on a closing market price per Ordinary Share of $37.88 on that date); 19,490 shares vested on February 13, 2007, with a value of $698,229 (based on a closing market price per Ordinary Share of $35.825 on that date); 10,144 shares vested on April 20, 2007, with a value of $407,231 (based on a closing market price per Ordinary Share of $40.145 on that date); 1,138 shares vested on April 26, 2007, with a value of $49,093 (based on a closing market price per Ordinary Share of $43.14 on that date); 9,000 shares vested on April 27, 2007, with a value of $392,355 (based on a closing market price per Ordinary Share of $43.595 on that date); and 61,388 shares vested on September 20, 2007, with a value of $3,035,636 (based on a closing market price per Ordinary Share of $49.45 on that date). |
| Number | ||||||||||||||
| of Years | Present | |||||||||||||
| Credited | Value of | Payments | ||||||||||||
| Service | Accumulated | During Last | ||||||||||||
| (#) | Benefit ($) | Fiscal Year | ||||||||||||
| Name | Plan Name | (1) | (1)(2) | ($) | ||||||||||
| David W. Williams (3) | — | — | — | — | ||||||||||
| Julie J. Robertson | Noble Drilling Corporation Salaried Employees’ Retirement Plan | 19.000 | $ | 233,925 | $ | 0 | ||||||||
| Noble Drilling Corporation Retirement Restoration Plan | 19.000 | $ | 613,488 | $ | 0 | |||||||||
| Thomas L. Mitchell (3) | — | — | — | — | ||||||||||
| Robert D. Campbell | Noble Drilling Corporation Salaried Employees’ Retirement Plan | 9.000 | $ | 187,493 | $ | 0 | ||||||||
| Noble Drilling Corporation Retirement Restoration Plan | 9.000 | $ | 406,676 | $ | 0 | |||||||||
| William A. Sears (3) | — | — | — | — | ||||||||||
| James C. Day | Noble Drilling Corporation Salaried Employees’ Retirement Plan | 29.455 | $ | 909,327 | $ | 40,373 | ||||||||
| Noble Drilling Corporation Retirement Restoration Plan | 29.455 | $ | 0 | $ | 10,743,991 | |||||||||
| Mark A. Jackson | Noble Drilling Corporation Salaried Employees’ Retirement Plan | 7.052 | $ | 86,875 | $ | 0 | ||||||||
| Noble Drilling Corporation Retirement Restoration Plan | 7.052 | $ | 371,267 | $ | 0 | |||||||||
| (1) | Computed as of December 31, 2007, which is the same pension plan measurement date used for financial statement reporting purposes with respect to the Company’s audited consolidated financial statements and notes thereto included in the 2007 Form 10-K. | |
| (2) | For purposes of calculating the amounts in this column, retirement age was assumed to be the normal retirement age of 65, as defined in the Noble Drilling Corporation Salaried Employees’ Retirement Plan. A description of the valuation method and all material assumptions applied in quantifying the present value of accumulated benefit is set forth in Note 9 to the Company’s audited consolidated financial statements in the 2007 Form 10-K. | |
| (3) | Not a participant in the Noble Drilling Corporation Salaried Employees’ Retirement Plan and the Noble Drilling Corporation Retirement Restoration Plan as of December 31, 2007. |
33
PensionPlanTable
| Five-Year Average | Estimated Annual Benefits Upon Retirement at Age 65 | ||||||||||||||||
| Annual | After Completion of the Following Years of Service (2) | ||||||||||||||||
| Compensation (1) | 15 | 20 | 25 | 30 | |||||||||||||
| $ | 125,000 | $ | 30,000 | $ | 40,000 | $ | 50,000 | $ | 60,000 | ||||||||
| 200,000 | 48,000 | 64,000 | 80,000 | 96,000 | |||||||||||||
| 300,000 | 72,000 | 96,000 | 120,000 | 144,000 | |||||||||||||
| 400,000 | 96,000 | 128,000 | 160,000 | 192,000 | |||||||||||||
| 600,000 | 144,000 | 192,000 | 240,000 | 288,000 | |||||||||||||
| 800,000 | 192,000 | 256,000 | 320,000 | 384,000 | |||||||||||||
| 1,000,000 | 240,000 | 320,000 | 400,000 | 480,000 | |||||||||||||
| 1,400,000 | 336,000 | 448,000 | 560,000 | 672,000 | |||||||||||||
| 1,800,000 | 432,000 | 576,000 | 720,000 | 864,000 | |||||||||||||
| • | |||
| • | six-tenths of one percent of the participant’s average monthly |
34
| Executive | Company | Aggregate | Aggregate | Aggregate | ||||||||||||||||
| Contributions in | Contributions in | Earnings in | Withdrawals/ | Balance at | ||||||||||||||||
| Name | Last FY ($) (1) | Last FY ($) (2) | Last FY ($) | Distributions ($) | Last FYE ($) | |||||||||||||||
| David W. Williams | $ | 18,521 | $ | 1,400 | $ | (831 | ) | $ | 0 | $ | 16,173 | |||||||||
| Julie J. Robertson | $ | 67,292 | $ | 11,375 | $ | 178,065 | $ | 0 | $ | 1,675,629 | ||||||||||
| Thomas L. Mitchell | $ | 10,500 | $ | 1,400 | $ | 83 | $ | 0 | $ | 9,983 | ||||||||||
| Robert D. Campbell | $ | 5,325 | $ | 2,000 | $ | 25,445 | $ | 0 | $ | 324,099 | ||||||||||
| William A. Sears (3) | — | — | — | — | — | |||||||||||||||
| James C. Day | $ | 104,400 | (4) | $ | 6,039 | $ | 1,166,908 | $ | 5,018,702 | $ | 4,735,593 | |||||||||
| Mark A. Jackson | $ | 7,404 | $ | 7,404 | $ | 56,002 | $ | 316,146 | $ | 268,056 | ||||||||||
| (1) | The Executive Contributions reported | |
| (2) |
As of December 31, 2004, the named executive officers had the following approximate credited years of service for retirement purposes: Mr. Day — 27; Mr. Jackson — 4; Mr. Adkins — 10; and Ms. Robertson — 16.
17
Equity Compensation Plan Information
The following table sets forth information regarding securities authorized for issuance under our equity compensation plans as of December 31, 2004.
| Number of securities | ||||||||||||
| remaining available for | ||||||||||||
| Number of securities to | Weighted-average | future issuance under | ||||||||||
| be issued upon exercise | exercise price of | equity compensation plans | ||||||||||
| of outstanding options, | outstanding options, | (excluding securities | ||||||||||
| Plan Category | warrants and rights | warrants and rights | reflected in column (a)) | |||||||||
| (a) | (b) | (c) | ||||||||||
| Equity compensation plans approved by security holders | 5,816,359 | $ | 31.99 | 4,199,303 | ||||||||
| Equity compensation plans not approved by security holders | N/A | N/A | 231,121 | (1) | ||||||||
| Total | 5,816,359 | $ | 31.99 | 4,430,424 | ||||||||
| (3) | ||
| (4) | Includes $58,333 of base salary that was deferred in the form of Ordinary Shares pursuant to the Noble Drilling Corporation |
Set forth below is a brief description of the material features of the equity compensation plans of the Company that have not been approved by members and for which information is included in the above table.
Noble Drilling Corporation401(k) Savings Restoration Plan.
35
| • | a lump sum amount equal to the sum of (i) any unpaid portion of the officer’s current salary, (ii) the prorated portion of the officer’s highest bonus paid either in the last three years before the change of control or for the last completed fiscal year after the change of control (the “Highest Bonus”), and (iii) any compensation previously deferred by the officer (together with any accrued interest or earnings thereon) and any accrued vacation pay, in each case to the extent not theretofore paid (collectively, the “Accrued Obligations”); | ||
| • | a lump sum payment equal to three times the sum of the officer’s annual base salary (based on the highest monthly salary paid in the 12 months prior to the change of control) and the officer’s Highest Bonus (the “Severance Amount”); |
36
| • | welfare benefits for a three-year period to the officer and the officer’s family at least equal to those that would have been provided had the employment not been terminated. If, however, the executive becomes reemployed with another employer and is eligible to receive welfare benefits under another employer provided plan, the welfare benefits provided by the Company and its affiliates would be secondary to those provided by the new employer (“Welfare Benefit Continuation”); | ||
| • | a lump sum amount equal to the excess of (i) the actuarial equivalent of the benefit under the qualified defined benefit retirement plan of the Company and its affiliated companies in which the officer would have been eligible to participate had the officer’s employment continued for three years after termination over (ii) the actuarial equivalent of the officer’s actual benefit under such plans (the “Supplemental Retirement Amount”); | ||
| • | an additional payment in an amount such that after the payment of all income and excise taxes, the officer will be in the same after-tax position as if no excise tax under Section 4999 (the so-called Parachute Payment excise tax) of the Code, if any, had been imposed (the “Excise Tax Payment”); | ||
| • | outplacement services; and | ||
| • | the 100 percent vesting of all unvested stock options granted or restricted stock awarded under the 1991 Plan and any other similar plan. |
| • | the acquisition by any individual, entity or group of 15 percent or more of the Company’s outstanding Ordinary Shares, but excluding any acquisition directly from the Company or by the Company, or any acquisition by any corporation pursuant to a reorganization, merger, amalgamation or consolidation if the conditions described below in the third bullet point of this definition are satisfied; | ||
| • | individuals who constitute the incumbent board of directors (as defined the agreement) of the Company cease for any reason to constitute a majority of the board of directors; | ||
| • | consummation of a reorganization, merger, amalgamation or consolidation of the Company, unless following such a reorganization, merger, amalgamation or consolidation (i) more than 50 percent of the then outstanding shares of common stock (or equivalent security) of the company resulting from such transaction and the combined voting power of the then outstanding voting securities of such company entitled to vote generally in the election of directors are then beneficially owned by all or substantially all of the persons who were the beneficial owners of the outstanding Ordinary Shares immediately prior to such transaction, (ii) no person, other than the Company or any person beneficially owning immediately prior to such transaction 15 percent or more of the outstanding Ordinary Shares, beneficially owns 15 percent or more of the then outstanding shares of common stock (or equivalent security) of the company resulting from such transaction or the combined voting power of the then outstanding voting securities of such company entitled to vote generally in the election of directors, and (iii) a majority of the members of the board of directors of the company resulting from such transaction were members of the incumbent board of directors of the Company at the time of the execution of the initial agreement providing for such transaction; | ||
| • | consummation of a sale or other disposition of all or substantially all of the assets of the Company, other than to a company, with respect to which following such sale or other disposition, (i) more than 50 percent of the then outstanding shares of common stock (or equivalent security) of such company and the combined voting power of the then outstanding voting securities of such company entitled to vote generally in the |
37
| election of directors are then beneficially owned by all or substantially all of the persons who were the beneficial owners of the outstanding Ordinary Shares immediately prior to such sale or other disposition of assets, (ii) no person, other than the Company or any person beneficially owning immediately prior to such transaction 15 percent or more of the outstanding Ordinary Shares, beneficially owns 15 percent or more of the then outstanding shares of common stock (or equivalent security) of such company or the combined voting power of the then outstanding voting securities of such company entitled to vote generally in the election of directors, and (iii) a majority of the members of the board of directors of such company were members of the incumbent board of directors of the Company at the time of the execution of the initial agreement providing for such sale or other disposition of assets; or | |||
| • | approval by the members of the Company of a complete liquidation or dissolution of the Company. |
| David W. | Julie J. | Thomas L. | Robert D. | |||||||||||||
| Payment or Benefit | Williams | Robertson | Mitchell | Campbell | ||||||||||||
| Accrued Obligations | $ | 150,000 | $ | 560,000 | $ | 100,000 | $ | 300,000 | ||||||||
| Severance Amount | $ | 1,950,012 | $ | 2,955,012 | $ | 1,499,988 | $ | 1,845,000 | ||||||||
| Welfare Benefit Continuation | $ | 80,359 | $ | 60,085 | $ | 75,916 | $ | 55,639 | ||||||||
| Supplemental Retirement Amount | $ | 0 | $ | 970,853 | $ | 0 | $ | 241,889 | ||||||||
| Excise Tax Payment | $ | 3,549,684 | $ | 4,752,304 | $ | 2,515,590 | $ | 0 | ||||||||
| Outplacement Services (1) | $ | 30,000 | $ | 25,000 | $ | 30,000 | $ | 25,000 | ||||||||
| Accelerated Vesting of Options and Restricted Shares (2) (3) | $ | 11,612,967 | $ | 9,279,045 | $ | 8,253,737 | $ | 3,991,043 | ||||||||
| (1) | Represents an estimate of the costs to the Company of outplacement services for one year. | |
| (2) | The total number of Restricted Shares held at December 31, 2007, and the aggregate value of accelerated vesting thereof at December 31, 2007 (computed by multiplying $56.51, the closing market price of the Ordinary Shares at December 31, 2007, times the total number of Restricted Shares held), were as follows: Mr. Williams – 165,935 shares valued at $9,376,987; Ms. Robertson – 144,576 shares valued at $8,169,990; Mr. Mitchell – 119,512 shares valued at $6,753,623; and Mr. Campbell – 62,316 shares valued at $3,521,477. |
38
| (3) | The total number of unvested options held at December 31, 2007, and the aggregate value of the accelerated vesting thereof at December 31, 2007 (computed by multiplying $56.51, the closing market price of Ordinary Shares at December 31, 2007, times the total number of Ordinary Shares subject to the options and subtracting the aggregate exercise price for the options) were as follows: Mr. Williams – 94,127 shares valued at $2,235,980; Ms. Robertson – 50,054 shares valued at $1,109,055; Mr. Mitchell – 71,640 shares valued at $1,500,114; and Mr. Campbell – 20,302 shares valued at $469,566. |
| Number of Ordinary Shares | ||||||||
| Underlying Unexercisable | ||||||||
| Options Subject to | Aggregate Value of | |||||||
| Name | Acceleration of Vesting | Acceleration of Vesting | ||||||
| David W. Williams | 66,667 | $ | 1,667,008 | |||||
| Julie J. Robertson | 27,170 | $ | 634,899 | |||||
| Thomas L. Mitchell | 53,334 | $ | 1,120,814 | |||||
| Robert D. Campbell | 10,386 | $ | 264,107 | |||||
| William A. Sears | 0 | $ | 0 | |||||
39
| • | the committee administrating the plan determines that any person or group has become the beneficial owner of more than 50 percent of the Ordinary Shares; | ||
| • | the Company is merged or amalgamated with or into or consolidated with another corporation and, immediately after giving effect to the merger, amalgamation or consolidation, less than 50 percent of the outstanding voting securities entitled to vote generally in the election of directors or persons who serve similar functions of the surviving or resulting entity are then beneficially owned in the aggregate by the members of the Company immediately prior to such merger, amalgamation or consolidation, or if a record date has been set to determine the members of the Company entitled to vote on such merger, amalgamation or consolidation, the members of the Company as of such record date; | ||
| • | the Company either individually or in conjunction with one or more subsidiaries of the Company, sells, conveys, transfers or leases, or the subsidiaries of the Company sell, convey, transfer or lease, all or substantially all of the property of the Company and the subsidiaries of the Company, taken as a whole (either in one transaction or a series of related transactions); | ||
| • | the Company liquidates or dissolves; or | ||
| • | the first day on which a majority of the individuals who constitute the board of directors of the Company are not continuing directors (within the meaning of the plan). |
| Number of Time-Vested | ||||||||
| Restricted Shares Subject to | Aggregate Value of | |||||||
| Name | Acceleration of Vesting | Acceleration of Vesting | ||||||
| David W. Williams | 86,785 | $ | 4,904,220 | |||||
| Julie J. Robertson | 30,236 | $ | 1,708,636 | |||||
| Thomas L. Mitchell | 66,746 | $ | 3,771,816 | |||||
| Robert D. Campbell | 12,640 | $ | 714,286 | |||||
| William A. Sears | 23,081 | $ | 1,304,307 | |||||
| Number of Performance-Vested | ||||||||
| Restricted Shares Subject to | Aggregate Value of | |||||||
| Name | Acceleration of Vesting | Acceleration of Vesting | ||||||
| David W. Williams | 52,793 | $ | 2,983,335 | |||||
| Julie J. Robertson | 76,265 | $ | 4,309,723 | |||||
| Thomas L. Mitchell | 35,195 | $ | 1,988,865 | |||||
| Robert D. Campbell | 33,134 | $ | 1,872,396 | |||||
| William A. Sears | 0 | $ | 0 | |||||
40
41
18
Performance Graph
In addition, we pay our non-employee directors a Board meeting fee of $2,000. We pay each member of our audit committee a committee fee of $2,500 per meeting and each member of our other committees a committee meeting fee of $2,000 per meeting. The following graph sets forth the cumulative total member (shareholder) return for the Ordinary Shareschair of the Company,audit committee receives an annual retainer of $15,000, the Standard & Poor’s 500 Stock Index,chair of the compensation committee receives an annual retainer of $12,500 and the Dow Jones U.S. Oil Equipment & Services Indexchair of each other standing Board committee receives an annual retainer of $10,000. We also reimburse directors for travel, lodging and related expenses they may incur in attending Board and committee meetings.
Comparison of Five-Year Cumulative Total Returnsamong Noble Corporation, S&P 500 IndexDirect andDow Jones U.S. Oil Equipment & Services Index
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Supplemental Performance Graph
The Company has elected to include in this proxy statement the following supplemental performance graph, which compares the cumulative total member (shareholder) return for the Ordinary Shares Broad Energy Peer Groups and the two indexes in the above graph over the period indicated below.
Comparison of Nineteen-Year Cumulative Total Returnsamong Noble Corporation, S&P 500 Index andDow Jones U.S. Oil Equipment & Services Index
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PROPOSAL TO AMEND ARTICLES OF ASSOCIATIONTO INCREASE DIRECTOR RETIREMENT AGE
Background and Reasons
Our articles of association provide a mandatory retirement age for directors. Priormade recommendations to the internal corporate restructuring in 2002 in which the Company became the successorcompensation committee. In order to Noble Drilling Corporation, the bylaws of Noble Drilling Corporation contained an identical provision regarding the retirement age of directors. Generally article 54 of the Company’s articles of association currently provides that an individual is eligible to be elected a director until the first annual general meeting of members after such individual becomes 70 years of age. A director duly elected is permitted to serve out the term to which he or she was elected notwithstanding that such director may have become age 70 during the term.
As described in the Corporate Governance Guidelines adopted byprovide our Board and posted on the Company’s website, our Board does not believe that arbitrary term limits on directors’ service are appropriate or that directors should expectwith flexibility annually to be re-nominated at the end of each term until they reach the mandatory retirement age. The Corporate Governance Guidelines further state that directors should possess the highest personal and professional ethics, character, integrity and values and that they must also possess an inquisitive and objective perspective, practical wisdom and mature judgment. The Company endeavorsalign non-employee director compensation more closely with compensation paid to have a board representing diverse experience in policy-making positions in areas that are relevant to Noble’s lines of business and areas of operations worldwide.
At its meeting in January 2004, the nominating and corporate governance committee of our Board reviewed the terms of article 54 and the procedure under the laws of the Cayman Islands to amend such provision. In addition, such committee reviewed and considered the effect of the retirement age provision on the then currentnon-employee directors of the Company, including William A. Sears. Director Sears, whose term will expire at the 2005 annual general meetingone or more comparator groups of members, became age 70 on April 8, 2004.
At its meeting in February 2005, the nominating and corporate governance committee of our Board approved the nomination of Mr. Sears on the following terms and conditions. The re-election of Mr. Sears as a director of the Company at the annual general meeting to serve a three-year term expiring in 2008 is conditional upon member adoption of the special resolution to increase the director retirement age described below. The number of directors constituting our Board will be reduced to seven from eight, and the number of directors in the class whose term expires in 2008 will be reduced to two from three, if members do not duly adopt the proposed special resolution.
Proposed Amendment of Articles of Association
Our Board has approved, and proposes and recommends to members that they adopt, the following special resolution to increase the director retirement age:
RESOLVED, that the Articles of Association of Noble Corporation are amended by deleting article 54 in its entirety and substituting therefor the following:
“54Each Director shall be at least 21 years of age. A person shall be eligible to be elected a Director of the Company until the annual general meeting of the Company next succeeding such person’s 72nd birthday, and any person serving as a Director on such Director’s 72nd birthday shall be eligible to complete such Director’s term as such. Directors need not be Members of the Company.”
Recommendation and Required Affirmative Vote
The affirmative vote of the holders of not less than a two-thirds majority of our Ordinary Shares entitled to vote and who do vote (in person or by proxy) at the meeting is required to approve the special resolution. Our Board has unanimously approved the proposed amendment and believes that it is in the best interests of the Company and our members.Accordingly, our Board recommends that you vote FOR adoption of the special resolution.
21
PROPOSAL REGARDING THENOBLE CORPORATION 1992 NONQUALIFIED STOCK OPTION PLANFOR NON-EMPLOYEE DIRECTORS
General
The Noble Corporation 1992 Nonqualified Stock Option Plan for Non-Employee Directors was approved by members (prior to April 30, 2002, stockholders of Noble Drilling Corporation) in 1993, and was amended with member approval in both 2000 and 2002 (as amended, the “1992 Plan”). In February 2005,companies, our Board amended and restated the 1992 Plan subject to member approval,in October 2007 to:
| • | eliminate the | ||
| • | eliminate the | ||
| • | modify the annual award of |
The
The purposeif no such date is selected by the Board, the date on which the Board action approving such award is taken. Any future award of the 1992 Plan is to promote the interests of the CompanyRestricted Shares will be evidenced by a written agreement that will include such terms and our members by attracting, retaining and stimulating the performance of qualified non-employee directors.
Proposal Regarding the 1992 Plan
1992 Plan Amendments. Prior to the 1992 Plan Amendments, the 1992 Plan didconditions not provide for awards to be made under the plan other than grants of stock options covering Ordinary Shares. As of January 31, 2005, there were outstanding options granted under the 1992 Plan covering 269,000 Ordinary Shares and 289,500 Ordinary Shares remained available for future grants under the 1992 Plan. The 1992 Plan Amendments would result in an additional 325,000 Ordinary Shares being available for future grants of stock options and awards of restricted shares under the plan. We intend to file a registration statement on Form S-8 under the Securities Act of 1933, as amended, as soon as practicable following member approval of the proposal to amend the 1992 Plan in accordanceinconsistent with the 1992 Plan Amendments to register the additional 325,000 Ordinary Shares that would become available for future grantsterms and awards under the plan.
In February 2005, our Board determined, based in part on market analysis performed by an independent compensation consulting firm, that the 1992 Plan Amendments described above were appropriate in order to continue to attract and retain qualified individuals to serve as non-employee directors of the Company. As a result our Board is proposing the 1992 Plan Amendments to our members at the annual general meeting. A copyconditions of the 1992 Plan as amended and restated, subject to member approval, is attached to this proxy statement as Annex C.
If the proposal regardingBoard considers appropriate in each case.
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additional benefits under
Description ofPlan, the Company sought and obtained from the NYSE confirmation that the October 2007 amendments were not considered by the NYSE to be material revisions to the 1992 Plan
The material features that would require member approval.
General. The 1992 Plan provides for automatic equityOctober 2007 amendments, non-employee directors received the grants and awards to directors who are not employees ofdescribed below in this and the Company or its subsidiaries or affiliated entities. Only non-employee directors are entitled to participate in the 1992 Plan. No executive officer of the Company who is an employee, or any other employee, is entitled to participate in the 1992 Plan.
Each non-employee director receives a one-time grant of an option to purchase 10,000 Ordinary Shares upon the first grant date after the director’s election or appointment to our Board. Thereafter, onnext paragraph. On the next business day after each annual general meeting of our members each such director automatically receives (i) aof the Company, the Company made an annual grant of an option to purchase 2,0004,000 Ordinary Shares and (ii) an annual award of 4,000 restricted shares.8,000 Restricted Shares. The options arewere granted at fair market value on the grant date, which was generally determined using the average of the daily closing prices of the Ordinary Shares for the 10 business days immediately preceding the date of grant, and are exercisable from time to time over a period generally commencing one year from the grant date and ending on the expiration of 10 years from the grant date, unless terminated sooner as described in the 1992 Plan.plan. The restricted shares are subjectRestricted Shares were awarded to restrictions until vested, and will vest one-third per year over three years commencing on the first anniversary ofone year from the award date, unless the restrictions are terminated sooner as described in the 1992 Plan.
The maximum number of Ordinary Shares issuable under the 1992 Plan is 975,000, subject to the adjustment provisions of the plan, of which 614,500 are available for future grants and awards under the plan. In the event ofdate. If a dividend payable in Ordinary Shares, split of the Ordinary Shares, Ordinary Share combination, reclassification of the Ordinary Shares, merger in which the Company is the surviving corporation, reorganization or the like, appropriate adjustments will be made in the maximum number of Ordinary Shares subject to the 1992 Plan, the number of restricted shares outstanding and the number of shares and option prices under then outstanding options.
The following table sets forth (i) the number of Ordinary Shares subject to options granted under the 1992 Plan for each of our current non-employee directors, (ii) the number of Ordinary Shares with respect to which options granted under the 1992 Plan have been exercised as of January 31, 2005, (iii) the number of restricted shares that each non-employee director will receive annually if members approve the 1992 Plan Amendments and (iv) the number of Ordinary Shares subject to options that each non-employee director will receive annually if members approve the 1992 Plan Amendments. In all cases regarding options, the exercise prices were equal to 100 percent of the fair market value of an Ordinary Share on the date of grant of the option:
1992 Plan
| Number of | Number of Shares | |||||||||||||||
| Restricted Shares | Subject to Options | |||||||||||||||
| Number of Shares | to be Awarded | to be Granted | ||||||||||||||
| Non-Employee | Subject to Past | Shares Acquired | Annually, Subject | Annually, Subject | ||||||||||||
| Directors | Option Grants | Upon Exercise | to Member Approval | to Member Approval | ||||||||||||
| Michael A. Cawley | 62,000 | 17,000 | 4,000 | 2,000 | ||||||||||||
| Lawrence J. Chazen | 55,000 | 24,000 | 4,000 | 2,000 | ||||||||||||
| Luke R. Corbett | 25,000 | 0 | 4,000 | 2,000 | ||||||||||||
| Marc E. Leland | 55,000 | 0 | 4,000 | 2,000 | ||||||||||||
| Jack E. Little | 37,500 | 0 | 4,000 | 2,000 | ||||||||||||
| Mary P. Ricciardello | 10,000 | 0 | 4,000 | 2,000 | ||||||||||||
| William A. Sears | 44,500 | 0 | 4,000 | 2,000 | ||||||||||||
The exercise prices for the options issued in the past under the 1992 Plan range from $6.76 to $47.69 per share. The closing price of our Ordinary Shares on the NYSE on March 15, 2005 was $55.21 per share.
Administration. The 1992 Plan is administered by our Board.
23
Types of Options. Options granted under the 1992 Plan will continue to be options which do not meet the requirements of Section 422 of the Internal Revenue Code of 1986 (the “Code”), and are, therefore, known as “nonqualified stock options.”
Option Exercise Price. The option exercise price is 100 percent of “Fair Market Value” per Ordinary Share on the date of grant. Under the 1992 Plan, the Fair Market Value is generally defined to mean the average of the closing sales prices of the Ordinary Shares for the 10 business days immediately preceding the date of grant.
Payment of Exercise Price. Payment for Ordinary Shares purchased upon the exercise of an option may be made by cash, check or appropriate exercise through an optionee’s brokerage firm, at the time of exercise.
Restricted Shares. A restricted share is an Ordinary Share that may not be sold, assigned, transferred, discounted, exchanged, pledged or otherwise encumbered or disposed of until the restrictions set by our Board have been satisfied (the “Restricted Period”). During the Restricted Period, unless specifically provided in the 1992 Plan, the recipient of restricted shares would be the record owner of such shares and have all the rights of a member with respect to such shares, including the right to vote and the right to receive dividends or other distributions made or paid with respect to such shares. The 1992 Plan provides that our Board has the authority to cancel all or any portion of any outstanding restrictions prior to the expiration of the Restricted Period. If during the Restricted Period a director to whom restricted shares has been awarded ceases to beserve as a director for any reason, any restricted shares remaining subject to restrictionsunvested Restricted Shares generally will be forfeited by such director; provided, however, if the director and transferred at no costcessation is due to the Company.
Term, Amendment and Termination of the 1992 Plan. To the extent permitted by law,such director’s death, retirement or disability, our Board may, amend, modify, suspendin its sole and absolute discretion, deem that the terms and conditions have been met for such director to retain all or terminate the 1992 Plan. However, underpart of such unvested Restricted Shares.
U.S. Federal Income Tax Consequences
The following summary is based on an analysis of the Code, existing laws, judicial decisions, administrative rulings, regulations and proposed regulations, all of which are subject to change. Moreover, the following is only a summary of U.S. federal income tax consequences and such consequences may be either more or less favorable than those described below depending on a director’s particular circumstances.
For U.S. federal income tax purposes, the grant of a nonqualified stock option with an exercise price equal to the fair market value of the underlying stock at the time of such grant should not result in recognition of income by the optionee. Upon exercise of a nonqualified stock option by an employee who is not then an officer or director, the excess of the fair market value of the shares on the exercise date over the option price will be considered as compensation taxable as ordinary income. If, however, at the time of exercise of the option, the optionee remains a director or is an “officer” as defined in Rule 16a-1 of the Securities Exchange Act of 1934, and if the sale of the stock at a profit within six months could subject such person to suit under Section 16(b) of the Securities Exchange Act of 1934, the fair market value of the stock is determined, and the tax applicable thereto is incurred, at the end of such six-month period or at such earlier time as may be determined by the occurrence of an event which causes Section 16(b) of the Securities Exchange Act of 1934 to become inapplicable to such person. In the event of a gain or loss realized upon the sale of the shares received upon exercise of a nonqualified stock option, the optionee will recognize long-term or short-term capital gain or loss, depending on the optionee’s holding periodCompany’s directors for the shares.
| Change in | ||||||||||||||||||||||||||||
| Pension Value | ||||||||||||||||||||||||||||
| Fees | Non-Equity | and | ||||||||||||||||||||||||||
| Earned | Incentive | Nonqualified | ||||||||||||||||||||||||||
| or Paid in | Stock | Option | Plan | Deferred | All Other | |||||||||||||||||||||||
| Cash | Awards ($) | Awards ($) | Compen- | Compensation | Compen- | |||||||||||||||||||||||
| Name (1)(2) | ($)(3) | (4) | (5) | sation ($) | Earnings ($) | sation ($) | Total ($) (6) | |||||||||||||||||||||
| Michael A. Cawley | $ | 104,000 | $ | 496,381 | $ | 18,290 | — | — | $ | 1,067 | $ | 619,738 | ||||||||||||||||
| Lawrence J. Chazen | $ | 134,000 | $ | 496,381 | $ | 18,290 | — | — | $ | 1,067 | $ | 649,738 | ||||||||||||||||
| Luke R. Corbett | $ | 96,000 | $ | 496,381 | $ | 18,290 | — | — | $ | 1,067 | $ | 611,738 | ||||||||||||||||
| Julie H. Edwards | $ | 125,500 | $ | 321,907 | $ | 91,452 | — | — | $ | 0 | $ | 538,859 | ||||||||||||||||
| Marc E. Leland | $ | 100,000 | $ | 496,381 | $ | 18,290 | — | — | $ | 1,067 | $ | 615,738 | ||||||||||||||||
| Jack E. Little | $ | 150,500 | $ | 496,381 | $ | 18,290 | — | — | $ | 1,067 | $ | 666,238 | ||||||||||||||||
| Mary P. Ricciardello | $ | 153,000 | $ | 496,381 | $ | 18,290 | — | — | $ | 1,067 | $ | 668,738 | ||||||||||||||||
| William A. Sears | $ | 102,500 | $ | 174,474 | $ | 18,290 | — | — | $ | 1,067 | $ | 296,331 | ||||||||||||||||
| (1) | The compensation paid to James C. Day and Mark A. Jackson for their services performed as directors of the Company during 2007 is fully reflected in the Summary Compensation Table. The compensation paid to Mr. Sears for services performed as a director of the Company prior to September 20, 2007, the effective date of his appointment on an interim basis as Chairman of the Board, Chief Executive Officer and President of the Company, is fully reflected in this Director Compensation table. No compensation was paid to Mr. Sears for services performed as a director of the Company during 2007 after the date of his appointment to such offices. |
Nonqualified stock options, such as the options that may be granted under the 1992 Plan, typically provide the issuer with a deduction equal to the amount of ordinary income recognized by the optionee at the time of such recognition by the optionee, subject to limitations on deductions set forth in the Code (e.g.,Section 162(m)). However, since the Company is a Cayman Islands company, the amounts that would otherwise be deductible by the
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| (2) | The total number of Restricted Shares and options to purchase Ordinary Shares outstanding as of December 31, 2007 under the 1992 Plan were as follows: Mr. Cawley – 8,002 shares and 84,000 options; Mr. Chazen – 8,002 shares and 48,000 options; Mr. Corbett – 8,002 shares and 58,000 options; Ms. Edwards – 0 shares and 20,000 options; Mr. Leland – 8,002 shares and 77,000 options; Mr. Little – 8,002 shares and 83,000 options; Ms. Ricciardello – 8,002 shares and 28,000 options; and Mr. Sears– 8,002 shares and 97,000 options. | |
| (3) | Includes the portion of the $50,000 annual retainer paid to our directors in Ordinary Shares pursuant to the Noble Corporation Equity Compensation Plan for Non-Employee Directors. | |
| (4) | Represents the dollar amount recognized for financial statement reporting purposes with respect to the year ended December 31, 2007 in accordance with SFAS No. 123R for unrestricted Ordinary Shares awarded in 2007 and Restricted Shares awarded in 2006 and 2005. Under the fair value recognition provisions of SFAS No. 123R, the grant date fair value of stock-based compensation is recognized as expense over the service period, which generally represents the vesting period. For the unrestricted Ordinary Shares awarded in 2007 to each director listed in the Director Compensation Table (other than Mr. Sears), the full SFAS No. 123R grant date fair value of $321,907 was recognized in 2007 on the date the award of unrestricted Ordinary Shares was made. Restricted Shares with a three-year vesting period were awarded in 2006 and 2005 to each director listed in the Director Compensation Table except for Ms. Edwards, who as a new non-employee director in 2006 then received the one-time grant of an option to purchase 20,000 Ordinary Shares. For the Restricted Shares awarded in 2006 and 2005, the dollar amount recognized in 2007 in accordance with SFAS No. 123R was $174,474. A description of the assumptions made in our valuation of stock and option awards is set forth in Note 6 to the Company’s audited consolidated financial statements in the 2007 Form 10-K. | |
| (5) | Represents the dollar amount recognized for financial statement reporting purposes with respect to the year ended December 31, 2007 in accordance with SFAS No. 123R for options granted in 2006 that vested in 2007. No options were granted in 2007. A description of the assumptions made in our valuation of stock and option awards is set forth in Note 6 to the Company’s audited consolidated financial statements in the 2007 Form 10-K. | |
| (6) | The compensation reflected in the Total column includes certain dollar amounts for Restricted Shares awarded in 2006 and 2005 and for options granted in 2006 that vested in 2007, as reported in accordance with the applicable rules of the SEC. See footnotes 4 and 5 above. As described under “Non-Employee Director Stock Options and Restricted Shares” preceding this table, the Board effected the October 2007 amendments to the 1992 Plan to provide flexibility annually to align non-employee director compensation more closely with compensation paid to non-employee directors of one or more comparator groups of companies. The compensation in the Total column, adjusted to deduct amounts attributable to pre-2007 compensation actions as referenced in the first sentence of this footnote, would be: |
| Name | Total | |||
| Cawley | $ | 426,974 | ||
| Chazen | $ | 456,974 | ||
| Corbett | $ | 418,974 | ||
| Edwards | $ | 447,407 | ||
| Leland | $ | 422,974 | ||
| Little | $ | 473,474 | ||
| Ricciardello | $ | 475,974 | ||
| Sears | $ | 103,567 | ||
Company for U.S. federal income tax purposes would be deductible only to the extent that the Company has United States source income from which to deduct such amounts.
The basis of shares transferred to an optionee upon the exercise of an option granted under the 1992 Plan is the price paid for such shares plus an amount equal to any income recognized by the optionee as a result of the exercise of the option. If an optionee thereafter sells shares acquired upon exercise of an option granted under the 1992 Plan, any amount realized over the basis of the shares will constitute capital gain to the optionee for U.S. federal income tax purposes. Additional special rules apply if an optionee uses already owned Ordinary Shares to pay the exercise price for shares under an option granted under the 1992 Plan.
If the restrictions on an award of restricted shares are of a nature that such shares are both subject to a substantial risk of forfeiture and are not freely transferable within the meaning of Section 83 of the Code, the recipient will not recognize income for U.S. federal income tax purposes at the time of the award. The recipient may, however, affirmatively elect within 30 days after the date the restricted shares are received to include the fair market value of the restricted shares on the date of the award, less any amount paid therefor, in gross income for the year of the award pursuant to Section 83(b) of the Code. In the absence of such an election, the recipient will be required to include in income for U.S. federal income tax purposes in the year in which the shares either become freely transferable or are no longer subject to a substantial risk of forfeiture within the meaning of Section 83 of the Code, the fair market value of the restricted shares on such date, less any amount paid therefor.
An issuer of restricted shares is generally entitled to a deduction at the time of income recognition to the recipient in an amount equal to the amount the recipient is required to include in income with respect to the shares, subject to the limitations on deductibility set forth in the Code (e.g.,Section 162(m)). If a Section 83(b) election is made and the restricted shares are subsequently forfeited, no deduction would be allowed to the recipient with respect to such forfeiture. As described above, as a Cayman Islands company, the Company will be entitled to any such deduction only to the extent that the Company has United States source income.
Under certain circumstances, Section 162(m) of the Code may limit the extent to which amounts are deductible by the employer/company. Section 162(m) generally limits the deduction for certain types of compensation paid to certain officers to no more than $1 million per year. If a non-employee director who received an award under the 1992 Plan later becomes one of such officers and recognizes income attributable to such award while serving as such an officer, Section 162(m) could limit the Company’s deduction. As noted above, however, the Company would be entitled to deductions, in any event, only to the extent that the Company had United States source income.
Recommendation and Required Affirmative Vote
The affirmative vote of the holders of a majority of our Ordinary Shares entitled to vote and who do vote (in person or by proxy) at the annual general meeting is required for approval of the proposal to amend the 1992 Plan in accordance with the 1992 Plan Amendments. Our Board has unanimously declared the proposal regarding the 1992 Plan advisable and believes that it is in the best interests of the Company and our members.Accordingly, our Board recommends that you vote FOR approval of the proposal.
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General
| Number of securities | ||||||||||||
| remaining available for | ||||||||||||
| Number of securities to | Weighted-average | future issuance under | ||||||||||
| be issued upon exercise | exercise price of | equity compensation plans | ||||||||||
| of outstanding options, | outstanding options, | (excluding securities | ||||||||||
| Plan Category | warrants and rights | warrants and rights | reflected in column (a)) | |||||||||
| (a) | (b) | (c) | ||||||||||
| Equity compensation plans approved by security holders | 4,397,773 | $ | 21.28 | 5,004,035 | ||||||||
| Equity compensation plans not approved by security holders | N/A | N/A | 255,504 | (1) | ||||||||
| Total | 4,397,773 | $ | 21.28 | 5,259,539 | ||||||||
| (1) | Consists of shares issuable under the Noble Drilling Corporation 401(k) Savings Restoration Plan and the Noble Corporation Equity Compensation Plan for Non-Employee Directors. |
The Equity Plan would continue to provide that 20 percent of the annual retainer fee will be paid to our non-employee directors in the form of our Ordinary Shares.
The purpose of the Equity Plan is to enable non-employee directors of the Company to acquire Ordinary Shares, and thereby to align their interests more closely with the interests of the other members of the Company, and to encourage the highest level of director performance by providing the non-employee directors with a more direct interest in the Company’s attainment of its financial goals.
Proposal Regarding the Equity Plan
Equity Plan Amendments. As of January 31, 2005, 46,240 Ordinary Shares remained available for future issuance under the Equity Plan. The Equity Plan Amendments would result in an additional 50,000 Ordinary Shares being available for future issuance under the plan and an increase in the amount of the annual retainer paid to directors from $35,000 to $50,000. Under the terms of the plan, 20 percent of the annual retainer is required to be paid by us in Ordinary Shares; however, directors may elect to apply the balance of the annual retainer to purchase Ordinary Shares. We intend to file a registration statement on Form S-8 under the Securities Act of 1933, as amended, as soon as practicable following member approval of the proposal to amend the Equity Plan in accordance with the Equity Plan Amendments to register the additional 50,000 Ordinary Shares available for future issuance under the plan.
In February 2005, our Board determined, based in part on market analysis performed by an independent compensation consulting firm, that the Equity Plan Amendments described above were appropriate in order to continue to attract and retain qualified individuals to serve as non-employee directors of the Company. As a result our Board is proposing the Equity Plan Amendments to our members at the annual general meeting. The Equity Plan Amendments are attached to this proxy statement as Annex D.
If the Equity Plan Amendments are approved by members, our non-employee directors would receive an annual retainer fee (20 percent of which is required under the Equity Plan to be paid in our Ordinary Shares) of $50,000, rather than $35,000 as is currently specified in the Equity Plan. This change would be effective for annual retainers paid and payable after August 1, 2004. Pursuant to the Equity Plan Amendments, our non-employee directors who are eligible to participate in the Equity Plan would receive additional benefits under the Equity Plan as a result of this change. These increased benefits would include an increase from $7,000 to $10,000 in the value of the portion of the annual retainer fee that is paid to our non-employee directors in the form of Ordinary Shares. This amendment would not apply to any payments of annual retainers under the Equity Plan made prior to August 1, 2004.
26
Description of the Equity Plan
The material features of the Equity Plan, giving effect to the Equity Plan Amendments, are as described below.
General. The Equity Plan provides for an annual retainer to directors who are not employees of the Company or its subsidiaries. Only non-employee directors are entitled to participate in the Equity Plan. No executive officers or other employees are entitled to participate in the Equity Plan. Each non-employee director receives an annual retainer of $50,000. Of this amount, (i) $40,000 shall be the cash component of the annual retainer, payable in quarterly installments of $10,000 each at the end of the three-month periods ending on March 31, June 30, September 30 and December 31 (each a “Plan Quarter”) in each year, and (ii) $10,000 shall be the equity component of the annual retainer, payable in Ordinary Shares in one installment at the end of the calendar year (the “Plan Year”). Non-employee directors can elect to have up to 100 percent of the cash component for each quarter applied to purchase Ordinary Shares. A non-employee director who serves in such capacity for less than a Plan Quarter or Plan Year shall have such amount prorated based on the number of days served in such capacity.
The maximum number of Ordinary Shares issuable under the Equity Plan is 125,000, subject to the adjustment provisions of the plan, of which 96,240 are available for future issuance under the plan. In the event of a dividend payable in Ordinary Shares, split of the Ordinary Shares, Ordinary Share combination, reclassification of the Ordinary Shares, merger or amalgamation in which the Company is the surviving corporation, reorganization or the like, appropriate adjustments will be made in the maximum number of Ordinary Shares subject to the Equity Plan.
Administration. The Equity Plan is administered by the compensation committee of the Board (the “Compensation Committee”). The Compensation Committee is authorized to interpret the Equity Plan, prescribe, amend and rescind rules and regulations relating to the Equity Plan, provide for conditions and assurances deemed necessary or advisable to protect the interests of the Company in connection with the Equity Plan, and make all other determinations concerning the Equity Plan.
Voluntary Share Purchase. For any Plan Quarter, a non-employee director may elect to have 100 percent of the cash component of the quarterly amount earned by such director applied to the purchase of Ordinary Shares in accordance with the Equity Plan.
Payment of Retainer. Promptly following the end of each Plan Quarter, the Company pays to each non-employee director the amount of the retainer earned by such person by delivering (i) an amount in cash equal to the amount earned for the quarter less any portion that the non-employee director elected to have applied to the purchase of Ordinary Shares and (ii) a number of Ordinary Shares determined by dividing the portion that the non-employee director elected to have applied to the purchase of Ordinary Shares by the “Current Market Price” of the Ordinary Shares as determined as of the last day of the Plan Quarter in accordance with the provisions of the Equity Plan. Promptly following the end of the Plan Year, the Company pays to each non-employee director such amount earned by such person by delivering to such person the number of Ordinary Shares determined by dividing (x) the amount earned by such person for the Plan Year by (y) the “Current Market Price” of the Ordinary Shares as determined on the last day of the Plan Year in accordance with the provisions of the Equity Plan. Under the Equity Plan, the Current Market Price is generally defined to mean the average of the daily closing prices of the Ordinary Shares for the 15 consecutive trading days immediately preceding the day in question (but not less than the par value of the Ordinary Shares).
Eligibility. Only directors who are not employees of the Company or its subsidiaries or affiliated entities are entitled to participate in the Equity Plan. A non-employee director shall not be entitled to receive an annual retainer under the Equity Plan if such director ceases to serve on our Board by reason of such director’s (i) fraud or intentional misrepresentation or (ii) embezzlement, misappropriation or conversion of assets or opportunities of the Company or any of its affiliates.
Term, Amendment and Termination of the Equity Plan. To the extent permitted by law, our Board may at any time suspend, terminate, amend or modify the Equity Plan. However, no amendment or modification may become effective without the approval of such amendment or modification by the members of the Company if the
27
Company, on the advice of counsel, determines that member approval is necessary or desirable. Under the rules of the New York Stock Exchange, certain amendments of the Equity Plan may not be made without the approval of members.
Recommendation and Required Affirmative Vote
The affirmative vote of the holders of a majority of our Ordinary Shares entitled to vote and who do vote (in person or by proxy) at the annual general meeting is required for approval of the proposal to amend the Equity Plan in accordance with the Equity Plan Amendments. Our Board has unanimously declared the proposal regarding the Equity Plan advisable and believes that it is in the best interests of the Company and our members.Accordingly, our Board recommends that you vote FOR approval of the proposal.
The audit committee of the Board has voted unanimously to appoint PricewaterhouseCoopers LLP to audit our financial statements for the year ending December 31, 2005,2008, subject to the approval of members. PricewaterhouseCoopers LLP has audited our financial statements since 1994. Representatives of PricewaterhouseCoopers LLP are expected to be present at the annual general meeting to respond to appropriate questions from members, and they will be given the opportunity to make a statement should they desire to do so.Our Board unanimously recommends that members vote FOR the appointment of PricewaterhouseCoopers LLP as independent auditors for 2005.2008.
2845
| • | integrity of the Company’s financial statements, | ||
| • | compliance by the Company with standards of business ethics and legal and regulatory requirements, | ||
| • | qualifications and independence of the Company’s independent auditors and | ||
| • | performance of the Company’s independent auditors and internal auditors. |
The audit committee discussed with the independent auditors the overall scope and plans for their audit. The audit committee meets with the independent auditors, with and without management present, to discuss the results of their examination, their evaluation of the Company’s internal controls and the overall quality of the Company’s financial reporting. The audit committee held seven20 meetings during 20042007 and met again onJanuary 24,23, 2008, February3 7, 2008 and March3, 2005.February 26, 2008. The number of meetings was greater as compared to historical periods as a result of the previously reported ongoing internal investigation of the Company’s Nigeria operations commissioned by the audit committee in June 2007.
Fees Paid to Independent Auditors
| 2004 | 2003 | |||||||||||||||
| 2007 | 2006 | |||||||||||||||
| Audit Fees (1) | $ | 2,482,000 | $ | 917,300 | $ | 2,393 | $ | 2,569 | ||||||||
| Audit-Related Fees (2) | 292,521 | 189,904 | 25 | 109 | ||||||||||||
| Tax Fees (3) | 978,843 | 1,328,157 | 2,803 | 1,895 | ||||||||||||
| All Other Fees | 0 | 0 | 0 | 0 | ||||||||||||
| Total | $ | 3,753,364 | $ | 2,435,361 | $ | 5,221 | $ | 4,573 | ||||||||
| (1) | Represents fees for professional services rendered for the audit of the Company’s annual financial statements for |
2946
| Form 10-Q for each of those years and for attestation on management’s assessment of internal | ||
| (2) | Represents fees for professional services rendered for benefit plan audits for 2007 and | |
| (3) | Represents fees for professional services rendered for tax compliance and advisory services and statutory tax reports for |
Effective January 2003, the audit committee established a policy to pre-approve all audit, audit-related, tax and other fees for services proposed to be rendered by the Company’s independent auditors prior to engagement of the auditors for that service. Consideration and approval of such services for 2004 generally occurred in the regularly scheduled quarterly meetings of the audit committee.
| February 26, 2008 | AUDIT COMMITTEE Mary P. Ricciardello, Chair Lawrence J. Chazen Julie H. Edwards Jack E. Little | |||
3047
MEMBER PROPOSALS AND
The cost of the solicitation of proxies, including the cost of preparing, printing and mailing the materials used in the solicitation, will be borne by the Company. The Company has retained The Altman Group to aid in the solicitation of proxies for a fee of $8,000$7,500 and the reimbursement of out-of-pocket expenses. Proxies may also be solicited by personal interview, telephone and telegram and via the Internet by directors, officers and employees of the Company, who will not receive additional compensation for those services. Arrangements also may be made with brokerage houses and other custodians, nominees and fiduciaries for the forwarding of solicitation materials to the beneficial owners of Ordinary Shares held by those persons, and the Company will reimburse them for reasonable expenses incurred by them in connection with the forwarding of solicitation materials.
Additional Information about the Company
| • | Our corporate governance guidelines. | ||
| • | The charters of each of our standing committees of the Board. | ||
| • | Our code of business conduct and ethics. | ||
| • | Our memorandum and articles of association. | ||
| • | Information concerning our business and recent news releases and filings with the SEC. | ||
| • | Information concerning our board of directors and member relations. |
| NOBLE CORPORATION | ||
| Chairman of the Board, Chief Executive Officer and | ||
3148
AMENDED AND RESTATED CHARTEROF THEAUDIT COMMITTEE OF THE BOARD OF DIRECTORSOFNOBLE CORPORATION
(Effective as of February 3, 2005)
This Amended and Restated Charter (this “Charter”) of the Audit Committee (the “Audit Committee” or the “Committee”) of the Board of Directors (the “Board”) of Noble Corporation (the “Corporation”) shall, effective as of February 3, 2005, amend and restate the Amended and Restated Charter of the Audit Committee, which was effective July 24, 2003.
I. PURPOSE
The primary purpose of the Audit Committee is to:
Assist with Board oversight of
Prepare reports of the Committee that are required by the rules of the Securities and Exchange Commission (“SEC”) to be included in the proxy statement for the Corporation’s annual general meeting of members.
Consistent with this purpose, the Committee should encourage continuous improvements in the Corporation’s policies, procedures and practices and compliance at all levels. The Committee should also foster open communications among the independent auditors, the Corporation’s financial and senior management, the internal auditors and the Board. The Committee shall have and may exercise all powers of the Board, except as may be prohibited by law, with respect to all matters encompassed by this Charter, and shall have the power and authority required under the Sarbanes-Oxley Act of 2002. The Committee will report regularly to the Board regarding the execution of its duties and responsibilities.
The Committee assists the Board and management in assuring appropriate corporate governance, functioning in an oversight role, recognizing that the Corporation’s management is responsible for preparing the Corporation’s financial statements, and the independent auditors are responsible for auditing those statements. The Committee is not providing any expert or special assurance as to the Corporation’s financial statements or any professional certification as to the independent auditor’s work.
II. COMPOSITION
The Audit Committee shall consist of a minimum of three directors, each of whom shall be appointed by the Board at each annual meeting of the Board following the annual general meeting of the members of the Corporation. Each member of the Audit Committee shall serve until the next such annual meeting of the Board or until his or her successor shall be duly appointed. Unless a Chairperson of the Committee is selected by the full Board, the members of the Committee may designate a Chairperson by majority vote of the entire Committee. The Committee and each of the Committee members shall satisfy the “independence”, expertise, experience and financial literacy requirements applicable to the Committee and its members that are established from time to time by the SEC or the New York Stock Exchange, or in accordance with the Sarbanes-Oxley Act of 2002 or other applicable laws. The Board shall determine whether at least one member of the Committee qualifies as an “audit committee financial expert” as defined in Item 401(h)(2) of Regulation S-K promulgated by the SEC. The existence of such a member, including his or her name and whether or not he or she is independent, shall be disclosed in periodic filings as required by the SEC.
A-1
ANNEX A
III. RESPONSIBILITIES
The following shall be recurring responsibilities of the Audit Committee in fulfilling its purposes. These responsibilities are set forth as a guide with the understanding that the Committee may diverge from this guide as appropriate.
1. The Committee has the sole authority and responsibility to select, retain and terminate the Corporation’s independent auditors. In carrying out this responsibility, the Committee should obtain and review a report from the Corporation’s independent auditors at least annually regarding
2. Evaluate the independence of the independent auditors, taking into account the opinions of the Corporation’s management and internal auditors. In this regard, the Committee shall obtain periodically from the independent auditors a formal written statement delineating all relationships between the independent auditors and the Corporation, including the matters set forth in Independence Standards Board Standard No. 1. In addition, the Committee shall engage in active dialogue with the independent auditors on all matters that could affect the independence of the auditors. The Committee shall review the experience and qualifications of the lead partner and other senior members of the independent audit team annually to determine that all partner rotation requirements are executed and the Committee shall consider whether there should be a regular rotation of the firm carrying out the audit. The Committee shall have the sole authority with respect to, and shall preapprove, all audit, review or attest engagements and permissible non-audit services, including the fees and terms thereof, to be performed by the independent auditors, subject to, and in compliance with, thede minimisexception for non-audit services described in Section 10A(i)(1)(B) of the Securities Exchange Act of 1934 and the applicable rules and regulations of the SEC.
3. Confer with the Corporation’s independent auditors concerning the scope of their audit of the financial statements of the Corporation; provide sufficient opportunity for the independent auditors to meet with the members of the Committee without members of management present; direct the attention of the independent auditors to specific matters or areas deemed by the Committee to be of special significance to the Corporation; and authorize such auditors to perform such supplemental reviews or audits as the Committee may deem necessary or appropriate.
4. Review with the independent auditor and the internal auditor the adequacy of the Corporation’s system of internal controls, including disclosure controls and procedures and the reliability of its financial reporting systems; confer with the Corporation’s independent auditors and internal auditors with respect to their assessment of the adequacy of such controls and systems; and review management’s response to any material weakness in the Corporation’s internal controls which may be identified; and report to the Board when significant issues exist.
5. Review the Corporation’s significant accounting principles and policies and significant changes thereto; review proposed and implemented changes in accounting standards and principles which have or may have a material impact on the Corporation’s financial statements; review significant management judgments and accounting estimates used in financial statement preparation, including alternative accounting treatments; and review the accounting for significant corporate transactions.
6. Review with the independent auditors any disagreements with management or difficulties they may have encountered in performing their audits of the financial statements of the Corporation and management’s response.
A-2
ANNEX A
7. Review with management and the independent auditors the audited financial statements to be included in the Corporation’s Annual Report on Form 10-K, including the Corporation’s disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operation,” and review and consider with the independent auditors the matters required to be discussed by Statement of Auditing Standards (SAS) No. 61 (as updated by SAS No. 89 and SAS No. 90), including deficiencies in internal controls, fraud, illegal acts, management judgments and estimates, audit adjustments, audit difficulties, and the independent auditors’ judgments about the quality of the Corporation’s accounting practices, prior to the Corporation’s filing of the Form 10-K with the SEC.
8. Review with the independent auditors and management the Corporation’s interim financial results to be included in each quarterly report on Form 10-Q, including the Corporation’s disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operation,” and any matters required to be discussed by SAS No. 100, prior to the Corporation’s filing of the related Form 10-Q with the SEC.
9. Review any disclosures that the Corporation’s chief executive officer and chief financial officer make to the Audit Committee and the independent auditors in connection with the certification process for the Corporation’s reports on Form 10-K and Form 10-Q concerning any significant deficiencies or material weaknesses in the design or operation of internal control over financial reporting and any fraud that involves management or other employees who have a significant role in the Corporation’s internal control over financial reporting.
10. Discuss with management the Corporation’s earnings press releases, as well as financial information and earnings guidance (paying particular attention to any pro forma or adjusted non-generally accepted accounting principle information) provided to the investing public, analysts and rating agencies. This may be done generally (i.e., discussion of the types of information to be disclosed and the type of presentation to be made); the Audit Committee need not discuss in advance each earnings release or each instance in which the Corporation may provide earnings guidance.
11. Confer separately, periodically, with the director of internal audit, management and the independent auditors as requested by any of them or by the Committee, and at least annually, and review reports they may present with respect to the functioning, quality and adequacy of programs for compliance with the Corporation’s policies and procedures regarding business ethics, compliance with applicable laws and regulations (such as environmental laws and regulations), financial controls and internal auditing, including information regarding violations or probable violations of such policies; and if appropriate conduct further investigations of such violations or probable violations and/or report the foregoing to the Board with such recommendations as the Committee may deem appropriate.
12. Review with the director of internal audit, at least annually, the activities, budget, staffing and structure of the internal auditing function of the Corporation, and any recommendations of the Committee with respect to improving the performance or strengthening of that function. This includes a periodic review with the director of internal audit of any significant difficulties, disagreements with management or scope restrictions encountered in the course of the internal auditor’s work.
13. Prepare reports of the Committee that are required by the rules of the SEC to be included in the proxy statement for the Corporation’s annual general meeting of members, as well as any other reports required by the SEC or the New York Stock Exchange.
14. Discuss with management the Corporation’s policies with respect to risk assessment and risk management.
15. Set clear policies regarding the hiring by the Corporation of employees or former employees of the independent auditors.
16. Review and reassess the adequacy of this Charter annually.
17. Establish procedures for (i) the receipt, retention, and treatment of complaints received by the Corporation regarding accounting, internal accounting controls or auditing matters; and (ii) the confidential,
A-3
ANNEX A
anonymous submission by employees of the Corporation of concerns regarding questionable accounting or auditing matters.
18. Review annually the performance of the Committee.
IV. MEETINGS
The Audit Committee shall meet at least quarterly, and at such other times as the members shall determine to be necessary or appropriate.
V. REPORTING
The proceedings of all meetings of the Audit Committee will be documented in the minutes, which will be approved by the Committee and presented at meetings of the full Board.
VI. RETENTION OF ADVISORS
The Committee shall have the authority to engage independent legal counsel and other advisors as it deems necessary to carry out its duties. The Corporation shall provide appropriate funding, as determined by the Committee, to engage any such advisors as well as to engage the Corporation’s independent auditors, and for the payment of ordinary and administrative expenses that are necessary or appropriate for carrying out its duties.
A-4
ANNEX B
ARTICLES 34, 54 AND 57
EXCERPTED FROM
THE ARTICLES OF ASSOCIATION
OF NOBLE CORPORATION
[Note: One of the purposes of the 2005 annual general meeting of members is to consider and vote upon a specialresolution to amend article 54 to increase the director retirement age to 72 from 70.]
34In order for business to be properly brought before a general meeting by a Member, the business must be legally proper and written notice thereof must have been filed with the Secretary of the Company not less than 60 nor more than 120 days prior to the meeting. Each such notice shall set forth: (a) the name and address of the Member who intends to make the proposal as the same appear in the Company’sCompany’s records; (b) the class and number of shares of the Company that are owned by such Member; and (c) a clear and concise statement of the proposal and the Member’sMember’s reasons for supporting it. The filing of a Member notice as required above shall not, in and of itself, constitute the making of the proposal described therein. If the chairman of the meeting determines that any proposed business has not been properly brought before the meeting, he shall declare such business out of order; and such business shall not be conducted at the meeting.
* * *
54Each Director shall be at least 21 years of age. A person shall be eligible to be elected a Director of the Company until the annual general meeting of the Company next succeeding such person’s 70thperson’s 72nd birthday, and any person serving as a Director on such Director’s 70thDirector’s 72nd birthday shall be eligible to complete such Director’sDirector’s term as such. Directors need not be Members of the Company.
* * *
B-1
ANNEX C
AMENDED AND RESTATEDNOBLE CORPORATION1992 NONQUALIFIED STOCK OPTION AND RESTRICTED SHARE PLANFOR NON-EMPLOYEE DIRECTORS
RECITALS
WHEREAS, Noble Drilling Corporation, a Delaware corporation (“Noble-Delaware”), established on December 17, 1992 the Noble Drilling Corporation 1992 Nonqualified Stock Option Plan for Non-Employee Directors;
WHEREAS, Noble Corporation, a Cayman Islands exempted company limited by shares (the “Company”), has previously assumed such plan (as amended and restated prior to the date hereof, the “Original Plan”) in connection with the corporate restructuring of Noble-Delaware;
WHEREAS, it is the purpose of the Original Plan to promote the interests of the Company and its members by attracting, retaining and stimulating the performance of qualified non-employee directors by giving them the opportunity to acquire a proprietary interest in the Company and an increased personal interest in its continued success and progress;
WHEREAS, pursuant to the provisions of Section 5.01 of the Original Plan, the Board of Directors of the Company may amend the Original Plan;
WHEREAS, the rules of the New York Stock Exchange (which are applicable to the Company) require that certain amendments of equity-compensation plans of listed companies be submitted to members for their approval; and
WHEREAS, the Board of Directors of the Company has determined that it is advisable to amend and restate the Original Plan, that such amendment and restatement of the Original Plan is appropriate and in the best interests of the Company and its members and that such amendment and restatement shall be submitted to the members of the Company for their approval in accordance with the rules of the New York Stock Exchange and the articles of association of the Company;
NOW THEREFORE, the Company does hereby amend and restate the Original Plan, subject to member approval, as follows:
ARTICLE I
GENERAL
1.01Definitions. As used herein the following terms shall have the following meanings:
(a) “Award Date” means the next business day after each annual general meeting of members of the Company occurring after the Effective Date.
(b) “Board” means the Board of Directors of the Company.
(c) “Code” means the United States Internal Revenue Code of 1986, as amended.
(d) “Company” means Noble Corporation, a Cayman Islands exempted company limited by shares, and its successors.
(e) “Director” means a member of the Board and does not include any person named as a director emeritus pursuant to the articles of association of the Company.
(f) “Effective Date” means February 4, 2005, the date of adoption of the Plan by the Board, subject to member approval.
C-1
ANNEX C
(g) “Employee” means any employee of the Company or any parent or subsidiary corporation of the Company within the meaning of Sections 424(e) and (f) of the Code.
(h) “Fair Market Value” means (1) the average of the closing sales prices of the Ordinary Shares for the 10 business days immediately preceding the date in question, as reported on a national securities exchange (if the Ordinary Shares are listed for trading on such exchange) or as reported of the NASDAQ National Market (if the Ordinary Shares are not listed for trading on a national securities exchange), or (2) if the Ordinary Shares are not listed for trading on a national securities exchange or is not listed as a national market security of NASDAQ or any similar system then in use, then the average of the mean between the bid and asked prices of the Ordinary Shares for the 10 business days immediately preceding the date in question, as reported by the National Association of Securities Dealers, Inc. Such closing sales prices shall be appropriately adjusted to take into account any share dividend, split or combination with respect to the Ordinary Shares that occurs within such 10 business day period.
(i) “Immediate Family Members” means the spouse, former spouse, children (including stepchildren) or grandchildren of an individual.
(j) “Initial Award” shall have the meaning assigned to such term in Section 3.02(b) hereof.
(k) “Non-Employee Director” shall mean an individual who (1) is now, or hereafter becomes, a Director by virtue of an election (a) by the members of the Company, or (b) to the extent permitted under applicable law and the articles of association of the Company, by the Board for the purpose of filling a vacancy on the Board resulting from the death, disability, resignation, removal or retirement of a Director or from an increase in the number of persons constituting the entire Board, (2) is neither an Employee nor an officer of the Company (i.e., an individual elected or appointed by the Board or chosen in such other manner as may be prescribed in the articles of association of the Company to serve as such) and (3) has not elected to decline to participate in the Plan with respect to a particular Option or award of Restricted Shares pursuant to Section 1.03 hereof.
(l) “Option” means any option to purchase Ordinary Shares granted pursuant to the Plan.
(m) “Optionee” means a Non-Employee Director who has been granted an Option.
(n) “Option Period” shall have the meaning assigned to such term in Section 3.02(d) hereof.
(o) “Ordinary Shares” means the Ordinary Shares, par value US$0.10 per share, of the Company.
(p) “Plan” shall mean this Amended and Restated Noble Corporation 1992 Nonqualified Stock Option and Restricted Share Plan for Non-Employee Directors, as it may be amended from time to time.
(q) “Restricted Shares” means Ordinary Shares issued or transferred pursuant to Article IV hereof.
(r) “Vesting Period” shall have the meaning assigned to such term in Section 4.02(d) hereof.
1.02Options. The Options shall be options that are not qualified as “incentive stock options” under Section 422 of the Code.
1.03Election to Not Participate in Grants or Awards. A Director otherwise eligible to participate in the Plan may elect to decline to accept any Option or award of Restricted Shares by giving notice thereof to the Company, or (i) in the case of an Option, by refusing to execute a share option agreement relating to such Option, or (ii) in the case of an award of Restricted Shares, by refusing to execute a restricted share agreement relating to such award.
C-2
ANNEX C
ARTICLE II
ADMINISTRATION
The Plan shall be administered by the Board. The Board shall have no authority, discretion or power to select the Non-Employee Directors who will receive Options or Restricted Shares or to set the number of shares to be covered by each Option or the number of Restricted Shares covered by each award. The Board shall have no authority, discretion or power to set the exercise price or the period within which Options may be exercised, or to alter any other terms or conditions specified herein, except in the sense of administering the Plan subject to the express provisions hereof, including Section 6.01.
Subject to the foregoing limitations, the Board shall have authority and power to adopt such rules and regulations and to take such action as it shall consider necessary or advisable for the administration of the Plan, and to construe, interpret and administer the Plan. The decisions of the Board relating to the Plan shall be final and binding upon the Company, the Non-Employee Directors, the Optionees, the holders of Restricted Shares and all other persons. No member of the Board shall incur any liability by reason of any action or determination made in good faith with respect to the Plan or any share option agreement or restricted share agreement entered into pursuant to the Plan.
ARTICLE III
GRANT OF OPTIONS
3.01Participation. Subject to Section 1.03, each Non-Employee Director shall be granted Options on the terms and conditions herein described.
3.02Share Option Agreements. Each Option shall be evidenced by a written share option agreement, which agreement shall be entered into by the Company and the Non-Employee Director to whom the Option is granted. Each such agreement shall include, incorporate or conform to the following terms and conditions, and such other terms and conditions not inconsistent therewith or with the terms and conditions of this Plan as the Board considers appropriate in each case:
(a)Grant. On each Award Date Options shall be granted automatically to each person who is a Non-Employee Director on such date.
(b)Number. Each Non-Employee Director who begins serving on the Board after the Effective Date shall automatically be granted an Option to purchase 10,000 Ordinary Shares on the first Award Date occurring after such person begins serving (the “Initial Award”). Each Non-Employee Director serving on an Award Date, and who is not entitled to receive an Initial Award on such date in accordance with the preceding sentence, shall automatically be granted, as of such date, an Option to purchase 2,000 Ordinary Shares.
(c)Price. The exercise price under each Option shall be the Fair Market Value per Ordinary Share on the Award Date of such Option.
(d)Option Period. Each Option shall be exercisable from time to time over a period (i) commencing upon the earlier of (A) the date that is one year following the Award Date of such Option and (B) the day immediately prior to the date of the next annual general meeting of members occurring following such Award Date, provided that the date of such annual general meeting of members is at least 355 days after such Award Date, and (ii) ending upon the expiration of ten years from such Award Date (the “Option Period”), unless terminated sooner pursuant to the provisions described in Section 3.02(e) below.
(e)Termination of Services, Death, Etc. Each share option agreement shall provide as follows with respect to the exercise of the Option evidenced thereby in the event that the Optionee ceases to be a Director for the reasons described in this Section 3.02(e):
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(i) If the Optionee ceases to be a Director on account of such Optionee’s (a) fraud or intentional misrepresentation, or (b) embezzlement, misappropriation or conversion of assets or opportunities of the Company or any direct or indirect majority-owned subsidiary of the Company, then the Option shall automatically terminate and be of no further force or effect as of the date the Optionee ceases to be a Director;
(ii) If the Optionee shall die during the Option Period while a Director (or during the additional five-year period provided by paragraph (iii) of this Section 3.02(e)), the Option may be exercised, to the extent that the Optionee was entitled to exercise it at the date of the Optionee’s death, within five years after such death (if otherwise within the Option Period), but not thereafter, by the executor or administrator of the estate of such Optionee, or by the person or persons who shall have acquired the Option directly from the Optionee by bequest or inheritance; or
(iii) If an Optionee ceases to be a Director for any reason (other than the circumstances specified in paragraphs (i) and (ii) of this Section 3.02(e)) within the Option Period, the Option may be exercised, to the extent the Optionee was able to do so at the date of termination of the directorship, within five years after such termination (if otherwise within the Option Period), but not thereafter.
(f)Transferability. No Option shall be transferable, other than by will or the laws of descent and distribution, or the rules thereunder, or pursuant to a qualified domestic relations order as defined in the Code or Title I of the Employee Retirement Income Security Act of 1974, as amended, and may be exercised during the life of the Optionee only by the Optionee, except as otherwise provided herein below. Notwithstanding the foregoing, all or a portion of the Options granted to an Optionee may be transferred by such Optionee (i) by gift to the Immediate Family Members of such Optionee, partnerships whose only partners are such Optionee or the Immediate Family Members of such Optionee, limited liability companies whose only shareholders or members are such Optionee or the Immediate Family Members of such Optionee, and trusts established solely for the benefit of such Optionee or the Immediate Family Members of such Optionee, or (ii) to any other persons or entities in the discretion of the Board; provided, that subsequent transfers of transferred Options shall be prohibited except those in accordance with this Section (by will or the laws of descent and distribution). Following transfer, any such Options shall continue to be subject to the same terms and conditions as were applicable immediately prior to transfer; provided, that for purposes of the Plan and any share option agreement under the Plan, the term “Optionee” shall be deemed to refer to the transferee. The events of any termination of association set forth in Section 3.02(e) of the Plan and in the share option agreement shall continue to be applied with respect to the original Optionee, following which the transferred Options shall be exercisable by the transferee only to the extent, and for the periods, specified in Section 3.02(e) of the Plan and in the share option agreement.
(g)Agreement to Continue in Service. Each Optionee shall agree to remain in the service of the Company, at the pleasure of the Company’s members, for a continuous period extending at least through the earlier of (i) the date that is one year following the Award Date of the Option and (ii) the day immediately prior to the date of the next annual general meeting of members occurring following such Award Date, at the retainer rate and fee schedule then in effect or at such changed rate or schedule as the Company from time to time may establish; provided, that nothing in the Plan or in any share option agreement evidencing an Option shall confer upon such Optionee any right to continue as a Director.
(h)Exercise, Payments, Etc. Each share option agreement between the Company and an Optionee shall provide that the method for exercising the Option evidenced thereby shall be by delivery to the President of the Company by United States registered or certified mail, postage prepaid, addressed to the Company, or by hand delivery, of written notice signed by the Optionee specifying the number Ordinary Shares with respect to which such Option is being exercised. Upon exercise of an Option, the purchase price for the Ordinary Shares purchased shall be paid in full by cash or check; provided, however, that at the request of an Optionee and to the extent permitted by applicable law, the Company shall approve reasonable arrangements with such Optionee and a brokerage firm under which such Optionee may exercise an Option by properly delivering notice of exercise, together with such other documents as the
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Company shall require, and the Company shall, upon payment in full by cash or check of the purchase price and any other amounts due in respect of such exercise, deliver to such Optionee’s brokerage firm one or more certificates representing Ordinary Shares issued in respect of such exercise.
Any notice given hereunder shall be deemed to be given on the date on which the same was deposited in a regularly maintained receptacle for the deposit of United States mail, addressed and sent as above-stated, or, in the case of hand delivery, on the date of delivery to the President of the Company. The proceeds of any sale of Ordinary Shares covered by Options shall constitute general funds of the Company. Upon exercise of an Option, the Optionee will be required to pay to the Company the amount of any federal, state or local taxes required by law to be withheld in connection with such exercise.
ARTICLE IV
AWARD OF RESTRICTED SHARES
4.01Participation. Subject to Section 1.03 hereof, each Non-Employee Director shall be awarded Restricted Shares on the terms and conditions herein described.
4.02Restricted Share Agreements. Each Restricted Share award shall be evidenced by a written restricted share agreement, which agreement shall be entered into by the Company and the Non-Employee Director to whom Restricted Shares are awarded. Each such agreement shall include, incorporate or conform to the following terms and conditions, and such other terms and conditions not inconsistent therewith or with the terms and conditions of this Plan as the Board considers appropriate in each case:
(a)Restricted Share Awards. On each Award Date occurring after the Effective Date, Restricted Shares shall be awarded automatically to each person who is a Non-Employee Director on such date; provided, however, that no such award shall be made to a Non-Employee Director in respect of the Award Date on which such director receives the Initial Award.
(b)Number. Each Non-Employee Director serving on an Award Date, other than any Non-Employee Director who is entitled to receive the Initial Award on such Award Date in accordance with Section 3.02, shall automatically be awarded, as of such date, 4,000 Restricted Shares.
(c)Price. There shall not be any purchase price charged for any Restricted Shares awarded under the Plan.
(d)Vesting Period. Each Restricted Share award shall vest one-third per year over three years commencing on the first anniversary of the Award Date (“Vesting Period”), unless terminated sooner pursuant to the provisions described in Section 4.02(g) below. If a Non-Employee Director is awarded Restricted Shares, whether or not escrowed as provided below, the Non-Employee Director shall be the record owner of such Restricted Shares and shall have all the rights of a member with respect to such Restricted Shares (unless the escrow agreement, if any, specifically provides otherwise), including the right to vote and the right to receive dividends or other distributions made or paid with respect to such Restricted Shares.
(e)Sale, Transferability, Etc. Restricted Shares may not be sold, transferred, assigned, pledged or otherwise encumbered or disposed of prior to the date all applicable restrictions lapse.
(f)Restrictive Legend. Any certificate or certificates representing Restricted Shares shall bear a legend similar to the following:
“The shares represented by this certificate have been issued pursuant to the terms of the Amended and Restated Noble Corporation 1992 Nonqualified Stock Option and Restricted Share Plan for Non-Employee Directors and may not be sold, assigned, transferred, discounted, exchanged, pledged or otherwise encumbered or disposed of in
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any manner except as set forth in the terms of the agreement embodying the award of such shares dated ___, 20___.”
In order to enforce the restrictions, terms and conditions that may be applicable to a Non-Employee Director’s Restricted Shares, the Board may require the Non-Employee Director, upon the receipt of a certificate or certificates representing such Restricted Shares, or at any time thereafter, to deposit such certificate or certificates, together with stock powers and other instruments of transfer, appropriately endorsed in blank, with the Company or an escrow agent designated by the Company under an escrow agreement in such form as by the Board shall prescribe. After the satisfaction of the restrictions, terms and conditions set by the Board at the time of an award of Restricted Shares to a Non-Employee Director, a new certificate, without the legend set forth above, for the number of Ordinary Shares that are no longer subject to such restrictions, terms and conditions shall be delivered to the Non-Employee Director.
(g)Termination of Service, Death, Etc. Each restricted share agreement shall provide as follows with respect to the award of Restricted Shares in the event that the holder of Restricted Shares ceases to be a Director for the reasons described in this Section 4.02(g):
(i) If the holder of Restricted Shares ceases to be a Director on account of such holder’s (a) fraud or intentional misrepresentation, or (b) embezzlement, misappropriation or conversion of assets or opportunities of the Company or any direct or indirect majority-owned subsidiary of the Company, then any Restricted Shares remaining subject to restrictions shall thereupon be forfeited by the holder and transferred to, and reacquired by, the Company or an Affiliate at no cost to the Company or the affiliate of the Company as of the date the holder ceases to be a Director.
(ii) The Board shall have the authority (and the restricted share agreement evidencing an award of Restricted Shares may so provide) to cancel all or any portion of any outstanding restrictions prior to the expiration of such restrictions with respect to any or all of the Restricted Shares awarded to a Non-Employee Director hereunder on such terms and conditions as the Board may deem appropriate.
(iii) If a Non-Employee Director to whom Restricted Shares has been awarded ceases to be a Director, for any reason, prior to the satisfaction of any terms and conditions of an award, any Restricted Shares remaining subject to restrictions shall thereupon be forfeited by the Director and transferred to, and reacquired by, the Company or an affiliate of the Company at no cost to the Company or such affiliate; provided, however, if the cessation is due to the person’s death, retirement or disability, the Board may, in its sole and absolute discretion, deem that the terms and conditions have been met for all or part of such remaining portion.
(iv) In case of any consolidation, amalgamation or merger of another corporation into the Company in which the Company is the surviving corporation and in which there is a reclassification or change (including a change to the right to receive cash or other property) of the Ordinary Shares (other than a change in par value, or from par value to no par value, or as a result of a subdivision or combination, but including any change in such shares into two or more classes or series of shares), the Board may provide that payment of Restricted Shares shall take the form of the kind and amount of shares of stock and other securities (including those of any new direct or indirect parent of the Company), property, cash or any combination thereof receivable upon such consolidation or merger.
(v) In the event of any forfeiture of Restricted Shares, the Director holding such shares, or in the event of his or her death, his or her personal representative, shall forthwith deliver to the Secretary of the Company the certificates for the Restricted Shares remaining subject to such restrictions, accompanied by such instruments of transfer, if any, as may reasonably be required by the Secretary of the Company.
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(h)No Right to Continue in Service. Nothing in the Plan or in any restricted share agreement evidencing the award of Restricted Shares shall confer upon such holder any right to continue as a Director.
ARTICLE V
AUTHORIZED ORDINARY SHARES
5.01Ordinary Shares. The total number of Ordinary Shares as to which Options may be granted or Restricted Shares may be awarded shall be 975,000, in the aggregate, except as such number of shares shall be adjusted from and after the Effective Date in accordance with the provisions of Section 5.02 hereof. If any outstanding Option shall expire or be terminated for any reason before the end of the Option Period, the Ordinary Shares allocable to the unexercised portion of such Option shall again be subject to the Plan. If any Restricted Shares are forfeited for any reason before the end of the Vesting Period, the Restricted Shares shall again be subject to the Plan. The Company shall, at all times during the life of any outstanding Options, retain as authorized and unissued Ordinary Shares at least the number of shares from time to time included in the outstanding Options or otherwise assure itself of its ability to perform its obligations under the Plan.
5.02Adjustments Upon Changes in Ordinary Shares. In the event the Company shall effect a split of the Ordinary Shares or dividend payable in Ordinary Shares, or in the event the outstanding Ordinary Shares shall be combined into a smaller number of shares, the maximum number of shares as to which Options may be granted or Restricted Shares may be awarded shall be increased or decreased proportionately. In the event that before delivery by the Company of all of the Ordinary Shares in respect of which any Option has been granted, the Company shall have effected such a split, dividend or combination, the shares still subject to the Option shall be increased or decreased proportionately and the purchase price per share shall be increased or decreased proportionately so that the aggregate purchase price for all the then optioned shares shall remain the same as immediately prior to such split, dividend or combination.
In the event of a reclassification of the Ordinary Shares not covered by the foregoing, or in the event of a liquidation, separation or reorganization, including a merger, consolidation or sale of assets, the Board shall make such adjustments, if any, as it may deem appropriate in the maximum number of shares then subject to being optioned or awarded as Restricted Shares and in the number, purchase price and kind of shares covered by the unexercised portions of Options theretofore granted. The provisions of this Section 5.02 shall only be applicable if, and only to the extent that, the application thereof does not conflict with any valid governmental statute, regulation or rule.
5.03Insufficient Ordinary Shares. If on the Award Date of any Option or Restricted Shares fewer Ordinary Shares remain available for grant or award under the Plan than are necessary to permit the grant of Options and/or the award of Restricted Shares in accordance with the provisions of Sections 3.02 and/or 4.02 hereof, then (i) first, an Option covering an equal number of whole Ordinary Shares, up to 10,000 shares, shall be granted on such date to each Non-Employee Director who is to receive an Initial Award on such date and (ii) second, Options shall be granted and Restricted Shares shall be awarded to the remaining Non-Employee Directors then serving covering, in the aggregate for each such Non-Employee Director, an equal number of whole Ordinary Shares, and all such Options and Restricted Shares so awarded to all such Non-Employee Directors shall cover, in the aggregate, all remaining Ordinary Shares then available for grant or award under the Plan. In the case of clause (ii), for each such Non-Employee Director, the number of Ordinary Shares to be covered by Options and the number of Restricted Shares shall be determined in accordance with the allocation of annual awards between Options and Restricted Shares that would occur if no such deficiency of Ordinary Shares existed.
ARTICLE VI
GENERAL PROVISIONS
6.01Amendment, Suspension or Termination of Plan. Subject to the limitations set forth in this Section 6.01, the Board may from time to time amend, modify, suspend or terminate the Plan. Nevertheless, no such amendment, modification, suspension or termination shall (a) impair any Options theretofore granted or Restricted
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Shares awarded, or (b) be made without the approval of the members of the Company where such change would (i) materially increase the total number of Ordinary Shares which may be issued under the Plan (other than as provided in Section 5.02 hereof), (ii) materially modify the requirements as to eligibility for participation in the Plan, (iii) materially increase the benefits accruing to participants under the Plan, (iv) have the effect of providing for the grant of options to purchase Ordinary Shares at less than the fair market value per share thereof on the applicable Award Date or (v) require the approval of members under the rules of any securities exchange on which the Ordinary Shares are then listed for trading. Notwithstanding any other provision of this Section 6.01, the provisions of the Plan governing (A) the number of Ordinary Shares covered by each Option, (B) the exercise price per Ordinary Share under each Option, (C) when and under what circumstances each Option will be granted, (D) the period within which each Option may be exercised or (E) the number of shares in each award of Restricted Shares, shall not be amended more than once every six months, other than to comport with changes in the Code or the rules promulgated thereunder, and the Employee Retirement Income Security Act of 1974, as amended, or the rules promulgated thereunder.
6.02Effectiveness. This Plan shall become effective as of the Effective Date, subject to and upon the receipt of member approval by the affirmative votes of the holders of a majority of the Ordinary Shares present, or represented, and entitled to vote at a meeting of members duly held in accordance with the applicable laws of the Cayman Islands.
6.03Paragraph Headings. The paragraph headings included herein are only for convenience, and they shall have no effect on the interpretation of the Plan.
6.04Gender. Words of any gender used in the Plan shall be construed to include any other gender.
IN WITNESS WHEREOF, the undersigned has executed this amendment and restatement of the Plan as of February 4, 2005.
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AMENDMENT NO. 2TO THENOBLE CORPORATIONEQUITY COMPENSATION PLANFOR NON-EMPLOYEE DIRECTORS
WHEREAS, Noble Corporation, a Cayman Islands exempted company limited by shares (the “Company”), has previously adopted the Noble Corporation Equity Compensation Plan for Non-Employee Directors (the “Plan”);
WHEREAS, the Board of Directors of the Company (the “Board”) has determined that certain amendments to the Plan are appropriate and in the best interests of the Company and its members; and
WHEREAS, pursuant to the provisions of Section 6 of the Plan and the rules of the New York Stock Exchange (which are applicable to the Company), the Board of Directors has determined to submit such amendments to members for their approval;
NOW THEREFORE, the Company does hereby amend the Plan, subject to member approval, as follows:
1. The first sentence of Section 4(a) of the Plan is amended by deleting “Seventy-five thousand (75,000)” in such section and replacing it with “One hundred twenty-five thousand (125,000)”.
2. Section 5(a) of the Plan is deleted in its entirety and the following is substituted in its place:
“Quarterly Amounts; Required Share Amount. Subject to the provisions of the Plan, each Outside Director shall be paid an annual retainer for serving as a director of the Company (the “Annual Retainer”). The amount of the Annual Retainer to be paid to each Outside Director for each Plan Year shall be $50,000. Of this amount, (i) $40,000 shall be the cash component of the Annual Retainer, payable in cash in quarterly installments of $10,000 each at the end of each Plan Quarter of the Plan Year (each such quarterly installment being herein referred to as a “Quarterly Amount”), and (ii) $10,000 shall be the equity component of the Annual Retainer, payable in Ordinary Shares in one installment at the end of the Plan Year (the “Required Share Amount”). An Outside Director who serves in such capacity for less than an entire Plan Quarter shall have his Quarterly Amount for such Plan Quarter pro-rated based on his number of days of service as an Outside Director during such Plan Quarter. An Outside Director who serves in such capacity for less than an entire Plan Year shall have his Required Share Amount for such Plan Year pro-rated based on his number of days of service as an Outside Director during such Plan Year.”
3. This Amendment No. 2 shall amend only those provisions of the Plan set forth herein, and those Sections, paragraphs and sentences not expressly amended hereby shall remain in full force and effect.
4. This Amendment No. 2 shall become effective as of August 1, 2004, subject to and upon the receipt of member approval by the affirmative votes of the holders of a majority of the Ordinary Shares present, or represented, and entitled to vote at a meeting of members duly held in accordance with the applicable laws of the Cayman Islands.
IN WITNESS WHEREOF, the undersigned has executed this Amendment No. 2 as of February 4, 2005.
D-1
THERE ARE THREE WAYS TO DELIVER YOUR PROXY
CONTROL NUMBER
TO DELIVER YOUR PROXY BY MAIL, PLEASE DETACH PROXY CARD HERE
(INSTRUCTION: To withhold authority to vote for any individual nominee, write the nominee’s name in the space provided below.)
IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING.
Change of address and/or comments? Mark here.o
Sign exactly as your name appears hereon. (If shares are held by joint tenants, both should sign. If signing as Attorney, Executor, Administrator, Trustee or Guardian, please give your title as such. If the signer is a corporation, please sign in the full corporate name by duly authorized officer.) Votes must be indicatedx in black or blue ink.
(Please complete, date and sign this proxy card and return it promptly in the enclosed postage prepaid envelope.)
PLEASE DETACH PROXY CARD HERE
NOBLE CORPORATION
SEE REVERSE SIDE
THERE ARE THREE WAYS TO DELIVER YOUR VOTING INSTRUCTIONS
 | ||||
CONTROL NUMBER
TO DELIVER YOUR VOTING INSTRUCTIONS BY MAIL, PLEASE DETACH VOTING INSTRUCTION CARD HERE
(INSTRUCTION: To withhold authority to vote for any individual nominee, write the nominee’s name in the space provided below.)
Change of address and/or comments? Mark here.o
This voting instruction card should be signed exactly as your name appears hereon.
Voting instructions must be indicatedx in black or blue ink.
(Please complete, date and sign this voting instruction card and return it promptly in the enclosed postage prepaid envelope.)
PLEASE DETACH VOTING INSTRUCTION CARD HERE
NOBLE CORPORATION
VOTING INSTRUCTION CARD FOR ORDINARY SHARES
Voting Instructions Solicited on Behalf of the Board of Directors.
The undersigned hereby instructs the trustee to vote, as designated below, all Ordinary Shares of Noble Corporation that are credited to the account(s) of the undersigned (whether or not vested) in the Noble Drilling Corporation 401(k) Savings Plan at the Annual General Meeting of Members of Noble Corporation to be held on April 28, 2005, and at any adjournment thereof, as more fully described in the notice of the meeting and the proxy statement accompanying the same, receipt of which is hereby acknowledged.
THIS VOTING INSTRUCTION CARD, WHEN DULY EXECUTED AND RETURNED, WILL BE VOTED BY THE TRUSTEE OF THE NOBLE DRILLING CORPORATION 401(k) SAVINGS PLAN (“401(k) PLAN”) IN THE MANNER DESIGNATED HEREIN BY THE UNDERSIGNED 401(k) PLAN PARTICIPANT. IF THIS VOTING INSTRUCTION CARD IS DULY EXECUTED AND RETURNED, BUT WITHOUT A CLEAR VOTING DESIGNATION, IT WILL BE VOTED “FOR” APPROVAL OF ITEMS 1, 2, 3, 4 AND 5.
(Continued and to be signed and dated on the reverse side)
SEE REVERSE SIDE
