Exhibit 10.6 Ensco Performance-Based Long-Term Incentive Award Summary |
Employee: Title: | Performance Period: Performance Target: |
The performance measures are Total Stockholder Return (TSR) and Return on Capital Employed (ROCE), as defined below: |
Total Stockholder Return (TSR)1 Dividends Per Share + (Ending Share Price - Beginning Share Price) Beginning Share Price | Return on Capital Employed (ROCE) Net Income2 + After Tax Net Interest Expense Capital Employed3 |
1 The beginning share price shall be defined as the average closing stock price for each trade day during the 4th quarter of 2008, and the ending share price shall be defined as the average closing stock price for each trade day during the 4th quarter of 2011.
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Measure | % of Target | Threshold | Target | Maximum | |
Relative TSR | 50% | Rank4 Award Multiplier Award $ | 9 of 11 0.25 | 6 of 11 1.00 | 1 of 11 2.33 |
Relative ROCE | 25% | Rank4 Award Multiplier Award $ | 9 of 11 0.25 | 6 of 11 1.00 | 1 of 11 2.33 |
Absolute ROCE | 25% | Percentage Achieved Award Multiplier Award $ | 8% 0.00 | 12% 1.00 | >18% 2.33 |
Award Total |
4 The rank is subject to change should the number of peer companies decrease. (See table below). Ensco's relative performance will be evaluated against a group of 10 peer companies, consisting of Atwood Oceanics, Inc., Diamond Offshore Drilling, Inc., Helmerich & Payne, Inc., Hercules Offshore, Inc., Nabors Industries Ltd., Noble Corporation, Parker Drilling Company, Pride International, Inc., Rowan Companies, Inc. and Transocean Ltd. If the group decreases in size during the Performance Period, as a result of mergers, acquisitions or economic conditions, the following table will be used to determine the appropriate multiplier to be applied to the target award amount. If the peer group drops below seven peers, the Company will develop a comparable scale based on those companies that remain in the peer group. |
Rank Against Peers | Multiplier (10 Peers) | Multiplier (9 Peers) | Multiplier (8 Peers) | Multiplier (7 Peers) | |
1 | 2.33 | 2.33 | 2.33 | 2.33 | |
2 | 2.04 | 2.00 | 2.00 | 1.95 | |
3 | 1.78 | 1.70 | 1.66 | 1.55 | |
4 | 1.52 | 1.40 | 1.33 | 1.15 | |
5 | 1.26 | 1.10 | 1.00 | 0.85 | |
6 | 1.00 | 0.90 | 0.70 | 0.425 | |
7 | 0.75 | 0.60 | 0.35 | 0.00 | |
8 | 0.50 | 0.30 | 0.00 | 0.00 | |
9 | 0.25 | 0.00 | 0.00 | ||
10 | 0.00 | 0.00 | |||
11 | 0.00 |
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