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EXHIBIT 10.10
DIAMOND OFFSHORE DRILLING, INC.
DEFERRED COMPENSATION AND SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
1. PURPOSE
The purpose of the Diamond Offshore Drilling, Inc. Deferred Compensation
Plan (the "Plan") is to provide select management employees of Diamond Offshore
Drilling, Inc. (the "Corporation"), and certain of its Subsidiaries and
Affiliates (hereinafter, with the Corporation, collectively referred to as the
"Company") an opportunity, in accordance with the terms and conditions set forth
herein, to defer, on a non-qualified basis, compensation that otherwise would be
payable currently and to provide supplemental retirement income.
2. ADMINISTRATION
The Plan shall be administered by a committee (the "Deferred Compensation
Committee", hereinafter referred to as the "Committee") consisting of at least
three members appointed by the Board of Directors of the Corporation (the
"Board"). The Committee shall have sole and complete authority to interpret the
terms and provisions of the Plan and to adopt, alter and repeal such
administrative rules, regulations and practices governing the operation of the
Plan as it shall from time to time deem advisable. The Committee may appoint a
person or persons to administer the Plan on a day-to-day basis.
3. ELIGIBILITY
The Committee shall have the sole and absolute discretion to select those
employees who shall participate in the Plan ("Participants") and shall determine
the extent to which Participants can defer base salary or any other form of
compensation. A Participant shall continue to participate in the Plan until the
Committee determines otherwise.
4. ELECTION TO DEFER
(a) Participant may elect to defer receipt of a portion of his/her base
salary and/or any other form of compensation including incentive compensation,
as (and to the extent) permitted by the Committee in accordance with rules and
procedures to be established from time to time by the Committee. Amounts
deferred under this Paragraph 4(a) shall be referred to as the "Deferred
Amounts." Election forms for Participants to defer compensation shall be
provided by the Committee, and all such elections shall be made in writing on
such forms. Once made, an election cannot be revoked.
(b) The election by a Participant to defer compensation shall be made
before the beginning of the calendar year in which such compensation is paid. A
Participant must make separate elections with respect to each calendar year of
participation in the Plan.
5. COMPANY DEFERRALS
To the extent hereinafter provided in this Paragraph 5, the Company shall
establish a memorandum account (a "Company Account") for each Participant on its
books.
The Company Account of each Participant shall be credited quarterly with an
amount equal to the excess, if any, of (a) over (b) where:
(a) equals the Company Contributions (as defined in the Retirement
Plan) to which such Participant would have been entitled under the Diamond
Offshore Defined Contribution Retirement Plan ("Retirement Plan") for each
calendar quarter assuming none of the Limitations (as defined in the
Retirement Plan) were imposed; and
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(b) equals the Company Contributions which were made on behalf of such
Participant under the Retirement Plan for each calendar quarter.
This would include any Participant whose Company Contributions were adversely
affected by the limitation on qualified plan income deferred to a non-qualified
plan such as when a Participant earns less than the current limit on eligible
compensation.
6. ESTABLISHMENT OF DEFERRED COMPENSATION ACCOUNT
At the time of the Participant's initial election to defer pursuant to
Paragraph 4, the Company shall establish a memorandum account (a "Deferred
Compensation Account") for each participant on its books. The Deferred Amount
(as determined under the Participant's election form) shall be credited to the
Participant's Deferred Compensation Account as of the day that the compensation
would otherwise have been paid to the Participant.
7. ADDITIONS TO DEFERRED AMOUNTS
Amounts equivalent to interest ("interest") shall be credited to a
Participant's Deferred Compensation Account at the end of each calendar year
based on the average balance (including Deferred Amounts and prior interest
credits) in the Participant's Account for such year. Interest for any calendar
year shall be computed at such rate (which may be a floating rate) as shall be
determined by the Committee with respect to all Deferred Compensation
subaccounts, subject to a minimum rate equal to the average Federal Funds Rate
for such year minus twenty-five basis points. A Deferred Compensation Account
that is paid out prior to the last day of a calendar year shall be credited with
interest for a partial year ending with the date of payout based on the average
balance in the Participant's Account for such partial year. The foregoing
notwithstanding, a Deferred Compensation Account that is paid out because of a
Participant's termination from employment pursuant to Paragraph 8 (c)(iii)
below, shall receive no interest credit for the year in which such termination
and/or payout occurs.
Amounts equivalent to interest ("interest") shall be credited to a
Participant's Company Account at the end of each calendar year based on the
average balance (including credits under section 5 of the Plan and prior
interest credits) in the Participant's Company Account for such year. Interest
for any calendar year shall be computed at such rate (which may be a floating
rate) as shall be determined by the Committee, subject to a minimum rate equal
to the average Federal Funds Rate for such year minus twenty-five basis points.
A Company Account that is paid out prior to the last day of a calendar year
shall be credited with interest for a partial year ending with the date of
payout based on the average balance in the Participant's Account for such
partial year. The foregoing notwithstanding, a Company Account that is paid out
because of a Participant's termination from employment pursuant to Paragraph
8(c)(iii) below shall receive no interest credit for the year in which such
termination and/or payout occurs.
8. PAYMENT OF DEFERRED AMOUNTS
For purposes of this Paragraph 8, continuous employment of the Participant
with the Company and any corporation or other entity that is the successor,
either directly or indirectly, to all or substantially all of the assets and/or
business of the Company shall be deemed continuous employment with the Company.
(a) Subject to the provisions of subparagraphs (c) and (d) below,
unless otherwise elected by the Participant in his/her election form in
accordance with rules established by the Committee, the period of deferral
shall be until termination of the Participant's employment with the
Company.
(b) The Participant may elect, in his/her election to defer, that
his/her Deferred Compensation Account be paid either (i) in a lump sum or
(ii) in such number of annual installments each as nearly equal as
possible, not to exceed fifteen, as the Participant shall elect under rules
established by the Committee. In the absence of an election by the
Participant, the Committee shall determine the manner of payment.
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(c)
(i) In the event of the Participant's death, payment of the balance
in the Participant's Deferred Compensation Account shall be made as
elected by the Participant in the election to defer, to the
Participant's designated beneficiary, or if none, to the Participant's
estate;
(ii) In the event of the Participant's termination from employment
from the Company for disability or retirement, payment of the balance in
the Participant's Deferred Compensation Account shall be made as elected
by the Participant in the election to defer; and
(iii) In the event of the Participant's termination from employment
with the Company for any reason other than death, or disability or
retirement, payment of the balance in the Participant's Deferred
Compensation Account shall be made in a lump sum, as soon as practicable
after the date of termination; the election of the Participant to the
contrary in his/her election to defer notwithstanding.
(d) Anything contained in this Paragraph 8 to the contrary
notwithstanding, in the event a Participant incurs a severe financial
hardship or a Participant becomes disabled, the Committee, in its sole and
absolute discretion and upon written application of such Participant, may
direct immediate payment of all or a portion of the then current value of
such Participant's Deferred Compensation Account; provided that, in the
case of a hardship, such payment shall in no event exceed the amount
necessary to alleviate such financial hardship.
(e) A Participant may make a new election at any time, provided that
such election will not be effective until one full calendar year elapses,
and further provided the Participant may not make a deferral election
regarding that year's compensation.
The Participant's Company Account will be paid out at termination of
employment.
9. TRANSFERABILITY OF INTERESTS
Except for the right of a Participant to designate a beneficiary as
hereinabove provided, a Participant's or beneficiary's, rights and interests may
not be anticipated, alienated, assigned, pledged, transferred or otherwise
encumbered.
10. AMENDMENT, SUSPENSION AND TERMINATION
The Corporation, in its sole and absolute discretion, at any time may
amend, suspend or terminate the Plan or any portion thereof in any manner and to
any extent. No such amendment, suspension or termination shall alter or impair
the rights of a Participant with respect to then Deferred Amounts.
11. DEFINITIONS
(a) The term "Subsidiary" shall mean any corporation 50 percent or
more of the voting stock of which shall at the time be owned directly or
indirectly by the Corporation.
(b) The term "Affiliate" means any corporation or other entity which
is not a Subsidiary but as to which the Corporation or a Subsidiary
possesses a direct or indirect ownership interest.
12. UNFUNDED OBLIGATION
No assets of the Company have been set aside to provide for the payment of
the Deferred Amounts. Assets of the Company are subject to the claims of the
Company's general creditors. The Plan is intended to be, and shall be operated
and administered so as to be, a plan which is unfunded and which is maintained
primarily for the purpose of providing deferred compensation for a select group
of management or highly compensated employees. The Company shall make no
provision for the funding or insuring of Deferred Amounts that would cause the
Plan to be (i) a "funded" plan for purposes of section 404(a)(5) of the
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Internal Revenue Code of 1986 or Title I of the Employee Retirement Income
Security Act of 1974, as amended, or (ii) other than an "unfunded and unsecured
promise to pay money or property in the future" under Treasury Regulations
sections 1.83-3(e). A Participant and his/her beneficiary shall be treated as a
general, unsecured creditor of the Company at all times under this Plan, except
as otherwise provided under applicable state law.
13. NO RIGHT TO EMPLOYMENT OR OTHER BENEFITS
This Plan shall not constitute a contract of employment between the Company
and the Participant, and nothing contained herein shall be construed as
conferring upon any Participant to right to continue in the employ of the
Company.
Any compensation deferred and any benefits paid under this Plan shall be
disregarded in computing benefits under any employee benefit plan of the
Company, except to the extent expressly provided for in such employee benefit
plans.
14. EFFECTIVE DATE
The Plan shall be effective immediately upon approval by the Board of
Directors of the Corporation.
15. GOVERNING LAW
The Plan shall be governed by the laws of the State of Texas without
reference to the principles of conflict of laws.