Item 5.02Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(d) Under the Governance Agreement, dated as of November 19, 2018 by and among Pacific Drilling S.A. (the “Company”) and certain holders of its common shares (the “Governance Agreement”), until the Nomination Termination Time (as defined below), Strategic Value Partners, LLC and its affiliated funds (the “SVP Parties”), the Avenue Parties (as defined in the Governance Agreement), and the Other Lenders (as defined in the Governance Agreement) each had the right to nominate one Class B Director, and each such parties also had the right to fill a vacancy with respect to its Class B Director nominee. The Nomination Termination Time means the first such time that it becomes known to the Company that any of (i) the Avenue Parties (collectively and in the aggregate with each other), (ii) the SVP Parties (collectively and in the aggregate with each other) or (iii) the Other Lenders (collectively and in the aggregate with each other), hold, beneficially or of record, and have the power to vote or direct the voting of, 10% or less of the then issued and outstanding shares of the Company. As previously reported, Donald Platner, the Class B Director proposed by the Other Lenders, and Bouk van Geloven, the Class B Director proposed by the SVP Parties, resigned from the Company’s Board of Directors (the “Board”) effective June 3, 2020 and June 5, 2020, respectively. No replacement nominee was proposed by either the Other Lenders or the SVP Parties.
On June 10, 2020, it became known to the Company that the SVP Parties held, beneficially or of record, and had the power to vote or direct the voting of, 10% or less of the then issued and outstanding shares of the Company, and as a result, the Nomination Termination Time occurred. As a result, the SVP Parties, the Avenue Parties, and the Other Lenders no longer have a right to nominate a director, or to fill any vacancies on the Board. Additionally, as of the Nomination Termination Time, the Board ceased to be classified and each director then in office previously designated as a Class A Director or Class B Director will remain in office as a director until his term expires or until his earlier death, resignation or removal by the shareholders.
On June 22, 2020, the Board appointed Roger B. Hunt and Jeff D. Hunter to serve as directors on the Board effective July 1, 2020, to fill the vacancies resulting from Donald Platner’s and Bouk van Geloven’s resignations. Mr. Hunt will serve on the Board’s compensation committee and Mr. Hunter will serve on the Board’s audit committee. In connection with the declassification of the Board described above, the Board also appointed Mr. Ramineni to serve on the Board’s nominating and corporate governance committee.
There is no arrangement or understanding between either Mr. Hunt or Mr. Hunter and any other person pursuant to which either was appointed as a director. There are no transactions in which Mr. Hunt or Mr. Hunter has an interest requiring disclosure under Item 404(a) of Regulation S-K.
Each of Messrs. Hunt and Hunter will be compensated for his services in accordance with the Company’s standard compensation program previously applicable to non-employee Class A Directors, but now applicable to all non-employee directors following the declassification of the Board as described above. Pursuant to this program, which was revised effective July 1, 2020, each of Messrs. Hunt and Hunter will receive an annual cash retainer of $190,000 and an additional annual cash retainer of $15,000 for service on a Board committee, which retainers are subject to the 10% reduction applicable to Board retainer fees approved effective April 1, 2020 and previously disclosed. The revised director compensation program no longer includes equity or deferred cash awards.
