| Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers |
Departure of Director
On April 25, 2023, Raj Iyer notified Diamond Offshore Drilling, Inc. (the “Company”) of his resignation from the Board of Directors of the Company (the “Board”), effective immediately. Mr. Iyer has served as a Class III director on the Board since April 23, 2021. There was no known disagreement between Mr. Iyer and the Company that led to his resignation from the Board.
Approval and Adoption of Short-Term Incentive Plan
On April 27, 2023, the Board, upon the recommendation of its Compensation Committee (the “Committee”), approved and adopted the Company’s Short-Term Incentive Plan (the “STIP”), under which executive officers and other employees of the Company may be eligible to receive performance-based cash incentive awards, cash bonuses or other cash awards.
The STIP will cover employees of the Company and its subsidiaries designated by the Committee as participants. Under the STIP, participants will be eligible to receive (i) performance awards, (ii) cash bonuses or other cash awards and/or (iii) any combination of the foregoing. The amount of a performance award payment under the STIP will depend on the level of achievement of performance objectives established by the Committee for the performance period and be expressed as a percentage of a participant’s annual base salary. The performance objectives will be described in terms of Company-wide objectives or of objectives that are related to performance of the participant or of the subsidiary, division, department or function within the Company in which the participant is employed.
The performance objectives may include a threshold level of performance below which no payment is made, target levels of performance at which specified payments will be made and a maximum level of performance above which no additional payment will be made. The performance period for a performance award will generally commence on January 1 of a calendar year and end on December 31 of such calendar year or a future calendar year. A performance award, to the extent that it has been earned, will be paid in a cash lump-sum no later than March 15 of the calendar year following the calendar year in which the performance period is completed.
Upon the occurrence of a Change in Control (as defined in the STIP), payouts on performance awards for the performance period during which the Change in Control occurs will be based on the sum of (a) the greater of (i) presumed achievement at the target level or (ii) actual achievement of applicable performance objectives through the date of the Change in Control, plus (b) presumed achievement at the target level for the remainder of the performance period beginning on the date following the Change in Control and ending on the last day of the performance period. The performance award payout will be made as soon as practicable following such Change in Control. The STIP also sets parameters for the Committee to determine, among other things, the treatment of STIP awards upon various termination events.
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