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SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement. [ ] Confidential, for use of the
Commission only (as permitted by
Rule 14a-6(e)(2)).
[X] Definitive proxy statement.
[ ] Definitive additional materials.
[ ] Soliciting material under Rule 14a-12.
Diamond Offshore Drilling, Inc.
(Name of Registrant as Specified in its Charter)
(Name of Person (s) Filing Proxy Statement, if other than the Registrant)
Check the appropriate box:
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6 (i) (1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] 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.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
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Diamond Logo
DIAMOND OFFSHORE DRILLING, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 23, 2001
To the Stockholders of
Diamond Offshore Drilling, Inc.:
NOTICE IS HEREBY GIVEN THAT the 2001 Annual Meeting of Stockholders of
Diamond Offshore Drilling, Inc., a Delaware corporation (the "Company"), will be
held at The Regency Hotel, 540 Park Avenue, New York, New York 10021 on
Wednesday, May 23, 2001 at 11:30 a.m., local time (the "Annual Meeting") for the
following purposes:
(1) To elect eight directors, each to serve until the next annual
meeting of stockholders and until their respective successors are elected
and qualified or until their earlier resignation or removal;
(2) To ratify the appointment of independent certified public
accountants for the Company and its subsidiaries; and
(3) To transact such other business as may properly come before the
Annual Meeting or any adjournments thereof.
The Company has fixed the close of business on March 26, 2001 as the record
date for determining stockholders entitled to notice of, and to vote at, the
Annual Meeting and any adjournments thereof. Stockholders who execute proxies
solicited by the Board of Directors of the Company retain the right to revoke
them at any time; unless so revoked, the shares of common stock represented by
such proxies will be voted at the Annual Meeting in accordance with the
directions given therein. If a stockholder does not specify a choice on such
stockholder's proxy, the proxy will be voted FOR the nominees for director named
in the attached Proxy Statement and FOR the ratification of the appointment of
the independent certified public accountants for the Company and its
subsidiaries named in such Proxy Statement. The list of stockholders of the
Company may be examined at the executive offices of the Company at 15415 Katy
Freeway, Suite 100, Houston, Texas 77094.
Further information regarding the Annual Meeting is set forth in the
attached Proxy Statement.
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING. HOWEVER, WHETHER OR
NOT YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON, PLEASE COMPLETE, DATE, SIGN
AND MAIL PROMPTLY THE ENCLOSED PROXY IN THE ENCLOSED POSTPAID ENVELOPE. THE
PROXY IS REVOCABLE AND WILL NOT BE USED IF YOU ARE PRESENT AT THE ANNUAL MEETING
AND PREFER TO VOTE YOUR SHARES IN PERSON.
By Order of the Board of Directors
Sincerely,
/s/ WILLIAM C. LONG
William C. Long
Vice President, General Counsel and
Secretary
April 5, 2001
15415 Katy Freeway
Houston, Texas 77094
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[DIAMOND]
PROXY STATEMENT
DIAMOND OFFSHORE DRILLING, INC.
FOR 2001 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 23, 2001
This Proxy Statement is being furnished to stockholders of Diamond Offshore
Drilling, Inc., a Delaware corporation (the "Company"), in connection with the
solicitation of proxies by the Board of Directors of the Company from such
stockholders for the 2001 Annual Meeting of Stockholders of the Company (the
"Annual Meeting") to be held on May 23, 2001 and any adjournments and
postponements thereof. Shares of the Company's Common Stock, par value $.01 per
share ("Common Stock"), represented by a properly executed proxy in the
accompanying form will be voted at the Annual Meeting. The proxy may be revoked
at any time before its exercise by sending written notice of revocation to
William C. Long, Corporate Secretary, Diamond Offshore Drilling, Inc., 15415
Katy Freeway, Houston, Texas 77094, or by signing and delivering a proxy which
is dated later, or, if the stockholder attends the Annual Meeting in person, by
giving notice of revocation to the Inspector(s) of Election (as hereinafter
defined) at the Annual Meeting.
The Company has fixed the close of business on March 26, 2001 as the record
date (the "Record Date") for the determination of stockholders entitled to
notice of, and to vote at, the Annual Meeting. On that date there were
outstanding and entitled to vote 133,232,793 shares of Common Stock, which is
the Company's only class of voting securities. The presence at the Annual
Meeting in person or by proxy of the holders of a majority of the outstanding
shares of Common Stock entitled to vote is required to constitute a quorum for
the transaction of business. Abstentions and broker non-votes will be counted in
determining whether a quorum is present. Each stockholder is entitled to one
vote for each share of Common Stock held of record. A plurality of the shares of
Common Stock present in person or represented by proxy and entitled to vote at
the Annual Meeting is required for the election of directors. Accordingly, the
eight nominees for election as directors at the Annual Meeting who receive the
greatest number of votes cast for election by the holders of record of Common
Stock on the Record Date shall be the duly elected directors upon completion of
the vote tabulation at the Annual Meeting. The affirmative vote of the holders
of a majority of the shares of Common Stock present in person or represented by
proxy and entitled to vote at the Annual Meeting is required for approval of all
other items being submitted to the stockholders for their consideration.
Abstentions will be considered present for purposes of calculating the vote, but
will not be considered to have been voted in favor of the matter voted upon, and
broker non-votes will not be considered present for purposes of calculating the
vote.
Votes will be tabulated by ADP Investor Communication Services, and the
results will be certified by one or more inspectors of election who are required
to resolve impartially any interpretive questions as to the conduct of the vote
(the "Inspector(s) of Election"). In tabulating votes, a record will be made of
the number of shares voted for each nominee or other matter voted upon, the
number of shares with respect to which authority to vote for that nominee or
such other matter has been withheld, and the number of shares held of record by
broker-dealers and present at the Annual Meeting but not voting.
This Proxy Statement is expected to be first mailed or delivered to
stockholders of the Company entitled to notice of the Annual Meeting on or about
April 16, 2001.
The date of this Proxy Statement is April 5, 2001.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The table below sets forth certain information with respect to each person
or entity known by the Company to be the beneficial owner of 5% or more of the
outstanding shares of Common Stock (based upon Schedule 13D and Schedule 13G
filings by such persons with the Securities and Exchange Commission (the
"Commission")). The percentages are calculated based on the amount of
outstanding securities as of March 15, 2001, excluding securities held by or for
the account of the Company.
AMOUNT AND
NATURE OF
NAME AND ADDRESS BENEFICIAL PERCENT
TITLE OF CLASS OF BENEFICIAL OWNER OWNERSHIP OF CLASS
-------------- ------------------- ------------- --------
Common Stock.............. Loews Corporation 70,100,000(1) 52.6%
667 Madison Avenue
New York, NY 10021-8087
Common Stock.............. Merrill Lynch & Co., Inc.(2) 8,171,784(2) 6.1%
World Financial Center, North Tower
250 Vesey Street
New York, NY 10381
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(1) Loews Corporation ("Loews") has sole investment power and sole voting power
over 70,100,000 shares.
(2) Merrill Lynch & Co., Inc. (on behalf of Merrill Lynch Investment Managers)
has shared investment power and shared voting power over 8,171,784 shares.
Because Loews holds more than a majority of the outstanding shares of
Common Stock of the Company, Loews has the power to approve matters submitted
for consideration at the Annual Meeting without regard to the votes of the other
stockholders. The Company understands that Loews intends to vote FOR the
election of management's nominees for the Board of Directors and FOR the
ratification of the appointment of Deloitte & Touche LLP as the Company's
independent auditors. There are no agreements between the Company and Loews with
respect to the election of directors or officers of the Company or with respect
to the other matters which may come before the Annual Meeting.
SECURITY OWNERSHIP OF MANAGEMENT AND DIRECTORS
The following table shows the amount and nature of beneficial ownership of
the Common Stock and of Loews common stock beneficially owned by each director
of the Company, each Named Executive Officer (as hereinafter defined) of the
Company and all directors and executive officers of the Company as a group, as
of March 15, 2001. All directors and executive officers of the Company
individually and as a group own less than 1% of the Common Stock of the Company.
Except as otherwise noted, the named beneficial owner has sole voting power and
sole investment power with respect to the number(s) of shares shown below.
COMPANY LOEWS
NAME OF BENEFICIAL OWNER COMMON STOCK COMMON STOCK(1)
------------------------ ------------ ---------------
James S. Tisch(2)...................................... 5,000 1,332,500
Lawrence R. Dickerson(3)............................... 1,887 0
Alan R. Batkin(4)...................................... 2,500 0
Herbert C. Hofmann(5).................................. 2,000 1,950
Arthur L. Rebell(6).................................... 2,000 2,375
William B. Richardson.................................. 0 0
Michael H. Steinhardt(7)............................... 1,500 0
Raymond S. Troubh(8)................................... 6,500 5,000
Rodney W. Eads......................................... 0 0
David W. Williams(9)................................... 1,293 0
John L. Gabriel, Jr.(10)............................... 1,229 0
All Directors and Executive Officers as a
Group(2)(3)(4)(5)(6)(7)(8)(9)(10)(11)................ 23,909 1,341,825
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(1) All share amounts reported with respect to Loews common stock do not give
effect to the two for one stock split, payable as a stock dividend,
declared by the board of directors of Loews on February 20, 2001 and paid
on March 21, 2001 to stockholders of record on March 6, 2001.
(2) The number of shares of Loews common stock includes 2,500 shares of Loews
common stock issuable upon the exercise of options granted under the Loews
Corporation 2000 Stock Option Plan which are currently exercisable. Also
includes 1,250,000 shares of Loews common stock held by a trust of which
Mr. Tisch is the managing trustee and beneficiary. In addition, 50,000
shares of Loews common stock are held by a charitable foundation as to
which Mr. Tisch has shared voting and investment power.
(3) Represents shares held by virtue of Mr. Dickerson's investment in Company
Common Stock pursuant to the Retirement Plan (as hereinafter defined), in
which he shares voting and investment power with his spouse.
(4) Includes 1,500 shares of Company Common Stock issuable upon the exercise of
options granted under the Company's 2000 Stock Option Plan which are
currently exercisable.
(5) Includes 1,500 shares of Company Common Stock issuable upon the exercise of
options granted under the Company's 2000 Stock Option Plan which are
currently exercisable. The number of shares of Loews common stock includes
1,550 shares of Loews common stock issuable upon the exercise of options
granted under the Loews Corporation 2000 Stock Option Plan which are
currently exercisable.
(6) Includes 1,500 shares of Company Common Stock issuable upon the exercise of
options granted under the Company's 2000 Stock Option Plan which are
currently exercisable. The number of shares of Loews common stock includes
1,875 shares of Loews common stock issuable upon the exercise of options
granted under the Loews Corporation 2000 Stock Option Plan which are
currently exercisable.
(7) Includes 1,500 shares of Company Common Stock issuable upon the exercise of
options granted under the Company's 2000 Stock Option Plan which are
currently exercisable.
(8) Includes 1,500 shares of Company Common Stock issuable upon the exercise of
options granted under the Company's 2000 Stock Option Plan which are
currently exercisable.
(9) Represents shares held by virtue of Mr. Williams' investment in Company
Common Stock pursuant to the Retirement Plan, in which he shares voting and
investment power with his spouse.
(10) Represents shares held by virtue of Mr. Gabriel's investment in Company
Common Stock pursuant to the Retirement Plan, in which he shares voting and
investment power with his spouse.
(11) The number of shares of Company Common Stock owned by all directors and
executive officers as a group includes 1,440 shares of Common Stock
beneficially owned, as of March 15, 2001, by executive officers of the
Company who are not Named Executive Officers. See "Executive Compensation."
Investment and voting power with respect to shares owned by Mr. Krenek is
shared with that executive officer's spouse.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
that the Company's executive officers and directors, and persons who
beneficially own more than ten percent of the Company's Common Stock, file
initial reports of ownership and reports of changes in ownership of the
Company's equity securities with the Commission and the New York Stock Exchange.
Executive officers, directors and greater than ten percent beneficial owners are
required by Commission regulations to furnish the Company with copies of all
Section 16(a) reports they file. Based solely on a review of such reports
furnished to the Company and written representations that no report on Form 5
was required for 2000, the Company believes that no director, executive officer
or beneficial owner of more than ten percent of the Common Stock failed to file
a report on a timely basis during 2000, except that Mr. Tisch's report on Form 5
for 2000 was filed late.
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ELECTION OF DIRECTORS
The Company's Board of Directors consists of eight directors. All directors
are elected annually to serve until the next annual meeting of stockholders and
until their respective successors are duly elected and qualified or until their
earlier resignation or removal. The executive officers of the Company are
elected annually by the Board of Directors to serve until the next annual
meeting of the Board of Directors and until their successors are duly elected
and qualified, or until their earlier death, resignation, disqualification or
removal from office. Information with respect to the current directors of the
Company is set forth below.
The nominees for director are James S. Tisch, Lawrence R. Dickerson, Alan
R. Batkin, Herbert C. Hofmann, Arthur L. Rebell, William B. Richardson, Michael
H. Steinhardt, and Raymond S. Troubh. Each of the eight directors to be elected
at the Annual Meeting will serve a term of one year to expire at the Company's
2002 annual meeting of stockholders.
It is intended that the proxies received from holders of Common Stock, in
the absence of contrary instructions, will be voted at the Annual Meeting for
the election of Messrs. Tisch, Dickerson, Batkin, Hofmann, Rebell, Richardson,
Steinhardt, and Troubh. Although the Company does not contemplate that any of
the nominees will be unable to serve, decline to serve, or otherwise be
unavailable as a nominee at the time of the Annual Meeting, in such event the
proxies will be voted in accordance with the authority granted in the proxies
for such other candidate or candidates as may be nominated by the Board of
Directors.
Further information concerning the nominees for election as directors at
the Annual Meeting, including their business experience during the past five
years, appears below.
AGE AS OF
JANUARY 31, DIRECTOR
NAME POSITION 2001 SINCE
---- -------- ----------- --------
James S. Tisch(1)............ Chairman of the Board and 48 1989
Chief Executive Officer
Lawrence R. Dickerson(1)..... Director, President and Chief 48 1998
Operating Officer
Alan R. Batkin(2)............ Director 56 1999
Herbert C. Hofmann(1)........ Director 58 1992
Arthur L. Rebell............. Director 59 1996
William B. Richardson........ Director 54 2001
Michael H. Steinhardt(2)..... Director 60 1997
Raymond S. Troubh(2)......... Director 74 1995
---------------
(1) Member, Executive Committee of the Board of Directors
(2) Member, Audit Committee of the Board of Directors
James S. Tisch has served as Chief Executive Officer of the Company since
March 1998. Mr. Tisch has served as Chairman of the Board since November 1995
and as a director of the Company since June 1989. Mr. Tisch has served as
President and Chief Executive Officer of Loews, a diversified holding company,
since January 1999 and, prior thereto, as President and Chief Operating Officer
of Loews from 1994. Mr. Tisch, a director of Loews since 1986, also serves as a
director of CNA Financial Corporation, an 87 percent owned subsidiary of Loews,
and serves as a director of Vail Resorts, Inc. and Baker, Fentress & Company.
Lawrence R. Dickerson has served as President, Chief Operating Officer and
a director of the Company since March 1998. Previously, Mr. Dickerson served as
Senior Vice President of the Company from April 1993 and Chief Financial Officer
of the Company from June 1989.
Alan R. Batkin has served as a director of the Company since July 1999. Mr.
Batkin has served as Vice Chairman of Kissinger Associates, Inc. since 1990. Mr.
Batkin also serves as a director of Overseas Shipholding Group, Inc., Hasbro,
Inc., and Schweitzer-Mauduit International, Inc.
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Herbert C. Hofmann has served as a director of the Company since January
1992. Mr. Hofmann has served as Senior Vice President of Loews since January
1992. He has served as President and Chief Executive Officer of Bulova
Corporation, a 97% owned subsidiary of Loews, which distributes and sells
watches and clocks, since 1989.
Arthur L. Rebell has served as a director of the Company since July 1996.
Mr. Rebell has served as Senior Vice President of Loews since June 1998. Mr.
Rebell served as a Managing Director of Strategic Management Company LLC from
November 1997 until June 1998. He served as a Managing Director of Highview
Capital Corporation from February 1997 to July 1997 and was a Professor of
Mergers & Acquisitions at New York University's Stern Graduate School of
Business from 1996 to 1998. Prior to February 1997, he served as a Managing
Director of Schroder & Co. Inc. for more than five years.
William B. Richardson has served as a director of the Company since March
2001. Mr. Richardson has served as an Adjunct Lecturer at Harvard University
since January 2001. Mr. Richardson served as U.S. Secretary of Energy from
August 1998 until January 2001. Prior to becoming Secretary of Energy, Mr.
Richardson served as U.S. Ambassador to the United Nations from February 1997
until August 1998 and as the U.S. Congressman representing New Mexico from
January 1983 until February 1997.
Michael H. Steinhardt has served as a director of the Company since
December 1997. Since December 1995, Mr. Steinhardt has been a Managing Member in
Steinhardt Management LLC. Prior thereto, he was Managing Partner of Steinhardt
Partners L.P., a hedge fund.
Raymond S. Troubh has served as a director of the Company since November
1995. Mr. Troubh is a financial consultant, a former Governor of the American
Stock Exchange and a former general partner of Lazard Freres & Co., an
investment banking firm. Mr. Troubh also serves as a director of ARIAD
Pharmaceuticals, Inc., General American Investors Company, Gentiva Health
Services, Inc., HealthNet Inc., MicroCap Liquidating Trust (Trustee), Petrie
Stores Liquidating Trust (Trustee), Starwood Hotels & Resorts (Trustee), Triarc
Companies, Inc. and WHX Corporation.
DIRECTOR COMPENSATION
Directors who are employees of the Company are not paid any fees or
additional compensation for service as members of the Board of Directors or any
committee thereof. During the first half of 2000, an annual retainer of $20,000
per annum, payable quarterly, was paid to directors of the Company who were not
employees of the Company or any of its subsidiaries or of Loews or any other
affiliated companies, for services as directors. Commencing with the third
quarter of 2000, the Company discontinued paying an annual retainer to
directors. Instead, each director who is not an employee of the Company receives
an award of an option to purchase 500 shares per quarter of the Company's Common
Stock in accordance with the terms of the Company's 2000 Stock Option Plan. The
options vest immediately and have a term of five years from the date of grant.
The Chairman of the Audit Committee of the Board of Directors of the Company
receives a retainer of $2,500 per annum, payable quarterly. Each director of the
Company who is not an employee of the Company or any of its subsidiaries or of
Loews or any other affiliated companies is paid a fee of $1,000 for attendance
at each meeting of the Board of Directors and of the Audit Committee in addition
to the reasonable costs and expenses incurred by such directors in relation to
their services.
BOARD OF DIRECTORS AND COMMITTEES
BOARD OF DIRECTORS
The Company's Board of Directors has eight members and two standing
committees. During 2000, the Board of Directors held six meetings. Further
information concerning the Board of Directors' standing committees appears
below.
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EXECUTIVE COMMITTEE
The Executive Committee of the Board of Directors consists of three
members, Mr. Tisch, Mr. Dickerson and Mr. Hofmann. The Executive Committee has
all the powers and exercises all the duties of the Board of Directors in the
management of the business of the Company that may lawfully be delegated to it
by the Board of Directors. These powers and duties include, among other things,
declaring a dividend, authorizing the issuance of stock, recommending to
stockholders mergers or a sale of substantially all of the assets of the
Company, providing advice and counsel to management of the Company, reviewing
management's recommendations for significant changes to the organizational
structure of the Company and recommending changes to the Board of Directors.
During 2000, the Executive Committee took action by unanimous written consent on
six occasions.
AUDIT COMMITTEE
The Audit Committee of the Board of Directors consists of three members,
Mr. Batkin, Mr. Steinhardt and Mr. Troubh. The primary function of the Audit
Committee is to assist the Board of Directors in fulfilling its responsibility
to oversee management's conduct of the Company's financial reporting process,
including review of the financial reports and other financial information of the
Company, the Company's systems of internal accounting, the Company's financial
controls, and the annual independent audit of the Company's financial
statements. Directors who are affiliates of the Company or officers or employees
of the Company or its subsidiaries or of Loews or any other affiliated companies
are not qualified for Audit Committee membership. During 2000, the Audit
Committee met four times.
The Company's Board of Directors has adopted a written charter under which
the Audit Committee operates (a copy of which is attached hereto as Exhibit A)
and has determined that all members of the Committee are "independent" in
accordance with the currently applicable rules of the New York Stock Exchange.
The Company's management is responsible for its financial statements and
reporting process, including its system of internal controls. The Company's
independent auditors are responsible for expressing an opinion on the conformity
of the Company's audited financial statements with accounting principles
generally accepted in the United States.
The information contained in this Proxy Statement with respect to the Audit
Committee charter and the independence of the members of the Audit Committee
shall not be deemed to be "soliciting material" or to be "filed" with the
Commission, nor shall such information be incorporated by reference into any
future filing under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, except to the extent that the Company
specifically incorporates it by reference in such filing.
AUDIT COMMITTEE REPORT
In fulfilling its responsibilities, the Audit Committee has reviewed and
discussed the Company's audited financial statements for the year ended December
31, 2000 with the Company's management and independent auditors. The Audit
Committee has also discussed with the Company's independent auditors the matters
required to be discussed by Statement on Auditing Standards No. 61,
"Communication with Audit Committees," as amended. In addition, the Audit
Committee has discussed with the independent auditors their independence in
relation to the Company and its management, and the matters in the written
disclosures provided to the Audit Committee as required by Independence
Standards Board Standard No. 1, "Independence Discussions with Audit
Committees."
The members of the Audit Committee are not experts in the fields of
accounting or auditing, including matters relating to auditor independence, and
rely without independent verification on the information provided to them by
management and the independent auditors. Accordingly, the Audit Committee's
oversight does not provide an independent basis to determine that management has
applied appropriate accounting and financial reporting principles or internal
controls and procedures, that the audit of the Company's financial statements
has been carried out in accordance with generally accepted auditing
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standards, that the Company's financial statements are presented in accordance
with generally accepted accounting principles, or that the Company's auditors
are in fact "independent."
Based on the review and discussions referred to above, the Audit Committee
has recommended to the Company's Board of Directors that the Company's audited
financial statements be included in the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 2000 filed with the Commission.
THE AUDIT COMMITTEE
Alan R. Batkin, Chairman
Michael H. Steinhardt
Raymond S. Troubh
The information contained in the foregoing report shall not be deemed to be
"soliciting material" or to be "filed" with the Commission, nor shall such
information be incorporated by reference into any future filing under the
Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as
amended, except to the extent that the Company specifically incorporates it by
reference in such filing.
ATTENDANCE AT MEETINGS
Each director of the Company attended not less than 75% of the total number
of meetings of the Board of Directors and committees of the Board of Directors
on which that director serves, with the exception of Michael H. Steinhardt who
attended approximately 30% of those meetings.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the Company's fiscal year ended December 31, 2000, the Company had
no compensation committee, although the Executive Committee of the Board of
Directors performed certain similar functions with respect to the compensation
and bonuses of the Company's executive officers. See "Board of Directors Report
on Executive Compensation -- General," "-- Annual Cash Bonus Incentives" and
"-- Compensation of the Chief Executive Officer." Decisions concerning
compensation of executive officers were made during such fiscal year by persons
who were members of the Company's Board of Directors, including James S. Tisch
and Lawrence R. Dickerson, executive officers of the Company.
NOMINATING COMMITTEE
During the Company's fiscal year ended December 31, 2000, the Company had
no nominating committee or other committee of the Board of Directors performing
similar functions.
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EXECUTIVE COMPENSATION
The following table shows for the years ended December 31, 2000, 1999 and
1998 the cash compensation paid by the Company, and a summary of certain other
compensation paid or accrued for each such year, to its Chief Executive Officer
and each of the Company's four other most highly compensated executive officers
as of December 31, 2000 (collectively, the "Named Executive Officers") for
service in all capacities with the Company and its subsidiaries.
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
AWARDS
------------
ANNUAL COMPENSATION(1) SECURITIES
----------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(2) OPTIONS(#) COMPENSATION(4)
--------------------------- ---- ---------- ---------- ------------ ---------------
James S. Tisch....................... 2000 $300,000 $ -- 20,000 $14,478
Chairman of the Board and 1999 300,000 -- -- 13,793
Chief Executive Officer 1998 214,808 180,000 -- 129
Lawrence R. Dickerson................ 2000 440,000 160,000 16,000 27,027
President and Chief Operating 1999 395,000 75,000 -- 24,156
Officer 1998 330,111 175,000 -- 17,075
David W. Williams.................... 2000 368,750 125,000 10,000 23,358
Executive Vice President 1999 337,500 50,000 -- 20,269
1998 284,344 140,000 -- 14,203
Rodney W. Eads....................... 2000 276,374 70,000 5,000 17,644
Senior Vice President -- 1999 263,144 35,000 -- 16,340
Worldwide Operations 1998 246,718 84,500 -- 13,032
John L. Gabriel, Jr. ................ 2000 240,483 74,000 6,000 14,795
Senior Vice President -- 1999 177,287 135,000 -- 11,301
Contracts and Marketing(3) 1998 160,469 71,000 -- 9,306
---------------
(1) Amounts exclude perquisites and other personal benefits because such
compensation did not exceed the lesser of $50,000 or 10% of the total annual
salary and bonus reported for each Named Executive Officer.
(2) Amounts include all deferred portions of bonuses based on service during the
respective year indicated by the Named Executive Officers. See "Board of
Directors Report on Executive Compensation -- Annual Cash Bonus Incentives."
(3) Mr. Gabriel has held such position since November 1999.
(4) The amounts shown for 2000 include (i) the Company's 3.75 percent
contribution under the Retirement Plan referred to below in the following
amounts on behalf of the following Named Executive Officers: Mr. Tisch,
$6,375; Mr. Dickerson, $6,375; Mr. Williams, $6,375; Mr. Eads, $6,375; and
Mr. Gabriel, $6,375, (ii) the Company's matching contribution under the
Retirement Plan referred to below in the following amounts on behalf of the
following Named Executive Officers: Mr. Dickerson, $1,600; Mr. Williams,
$2,249; Mr. Eads, $2,303; and Mr. Gabriel, $2,271, (iii) the Company's
contributions for group term life insurance, spouse/dependent life
insurance, and long-term disability insurance in the following amounts on
behalf of the following Named Executive Officers: Mr. Tisch, $2,853; Mr.
Dickerson, $2,853; Mr. Williams, $2,853; Mr. Eads, $2,707; and Mr. Gabriel,
$2,368, (iv) the Company's contributions under the Deferred Compensation and
Supplemental Executive Retirement Plan referred to below in the following
amounts on behalf of the following Named Executive Officers: Mr. Tisch,
$5,251; Mr. Dickerson, $16,199; Mr. Williams, $11,881; Mr. Eads, $6,259; and
Mr. Gabriel, $3,781. In some cases, the total of the foregoing itemized
amounts does not equal the corresponding aggregate amount set forth in the
"All Other Compensation" column due to rounding.
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The Company maintains a defined contribution plan (the "Retirement Plan")
designed to qualify under Section 401(k) of the Internal Revenue Code of 1986,
as amended (the "Code"), pursuant to which the Company contributes 3.75 percent
of the participant's defined compensation and the Company matches 25 percent of
the first 6 percent of each participant's compensation contributed. Participants
are fully vested immediately upon enrollment in the plan. Up to 25 percent of
the amount of such contributions to the Retirement Plan may be used by the
participants to purchase shares of Common Stock of the Company.
In addition, under the Company's Deferred Compensation and Supplemental
Executive Retirement Plan, the Company contributes to participants any portion
of the 3.75 percent of the base salary contribution and the matching
contribution to the Retirement Plan that cannot be contributed because of the
limitations within the Code and because of elective deferrals that the
participant makes under the plan. Additionally, the plan provides that
participants may defer up to 10 percent of base compensation and/or up to 100
percent of any performance bonus. Participants in this plan are a select group
of management or highly compensated employees of the Company and are fully
vested in all amounts paid into the plan.
STOCK OPTION PLAN
On March 28, 2000, the Company adopted the Company's 2000 Stock Option
Plan, which was approved by its stockholders on May 16, 2000. Under the terms of
the plan, certain of the Company's employees, consultants and non-employee
directors may be granted options to purchase Common Stock at no less than 100%
of the fair market value of the Common Stock on the date the option is granted.
The Stock Option Plan is administered by the Board of Directors. Such plan
authorizes the issuance of options to acquire up to 750,000 shares of the
Company's Common Stock, none of which had been exercised as of December 31,
2000. Unless otherwise specified by the Board of Directors at the time of the
grant, stock options have a maximum term of ten years, subject to earlier
termination under certain conditions, and vest in four equal, annual
installments over four years.
The following table shows for the year ended December 31, 2000 stock
options granted by the Company to the Named Executive Officers.
OPTIONS GRANTED IN 2000
NUMBER OF
SECURITIES % OF TOTAL EXERCISE
UNDERLYING OPTIONS GRANTED PRICE PER EXPIRATION PRESENT VALUE AT
NAME OPTIONS GRANTED IN 2000(1) SHARE DATE GRANT DATE(2)
---- --------------- --------------- --------- ------------ ----------------
James S. Tisch........... 20,000 17.70% $43.03 May 16, 2010 $536,800
Lawrence R. Dickerson.... 16,000 14.16 43.03 May 16, 2010 429,440
David W. Williams........ 10,000 8.85 43.03 May 16, 2010 268,400
Rodney W. Eads........... 5,000 4.42 43.03 May 16, 2010 134,200
John L. Gabriel, Jr. .... 6,000 5.31 43.03 May 16, 2010 161,040
---------------
(1) This calculation is based on options to purchase a total of 113,000 shares
of Common Stock granted to employees under the Company's 2000 Stock Option
Plan during 2000.
(2) The per share weighted-average fair value of stock options granted May 16,
2000 was $26.84 per share. The fair value of each stock option granted was
estimated on the date of grant using the Binomial Option Pricing Model.
Assumptions used in the model included a weighted average risk-free interest
rate of 6.71%, an expected life of options of six years, expected volatility
of the Company's Common Stock price of 69% and an expected dividend yield on
the Company's Common Stock of 1.25%.
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YEAR END OPTION VALUES
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS
DECEMBER 31, 2000 AT DECEMBER 31, 2000
------------------------------ ------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
James S. Tisch.......................... -- 20,000 -- --
Lawrence R. Dickerson................... -- 16,000 -- --
David W. Williams....................... -- 10,000 -- --
Rodney W. Eads.......................... -- 5,000 -- --
John L. Gabriel, Jr. ................... -- 6,000 -- --
BOARD OF DIRECTORS REPORT ON EXECUTIVE COMPENSATION
GENERAL
Recommendations regarding compensation of the Company's executive officers
are prepared by the President and submitted to the Executive Committee of the
Board of Directors for approval, except that the President does not participate
in the preparation of recommendations, or the review, modification or approval
thereof, with respect to his own compensation.
The Company's compensation program is designed to enable the Company to
attract, motivate and retain high-quality senior management by providing a
competitive total compensation opportunity based on performance. Toward this
end, the Company provides for competitive base salaries, annual variable
performance incentives payable in cash, and stock options for the achievement of
financial performance goals.
SALARIES
Every salaried employee of the Company is assigned a salary grade at the
commencement of employment pursuant to a system that considers objective
criteria, such as the employee's level of financial responsibility and
supervisory duties, and the education and skills required to perform the
employee's functions; however, the assignment of an employee to a particular
salary grade necessarily involves subjective judgments. Within each grade,
salaries are determined within a range based solely on subjective factors such
as the employee's contribution to the Company and individual performance. No
fixed, relative weights are assigned to these subjective factors. On occasion,
an officer's compensation will be fixed at a level above the maximum level for
his or her salary grade in response to a subjective determination that the
officer's compensation, if set at the maximum level for his or her grade, would
be below the level merited by his or her contributions to the Company.
ANNUAL CASH BONUS INCENTIVES
Annual cash bonus incentives may be awarded under the Diamond Offshore
Management Bonus Program, which is intended to provide a means whereby certain
selected officers and key employees of the Company may develop a sense of
proprietorship and personal involvement in the development and financial success
of the Company, and encourage the participants to remain with and devote their
best efforts to the business of the Company, thereby advancing the interests of
the Company and its stockholders. The Executive Committee of the Company's Board
of Directors is authorized to establish an annual bonus pool based on such
committee's evaluation of the Company during the year relative to peer
companies, the performance of the Company's share price and extraordinary events
during the year. The Executive Committee did establish a bonus pool (the "Bonus
Pool") for fiscal year 2000. The Executive Committee established the bonus
payout from the Bonus Pool based upon corporate, group or individual
performance, or a combination thereof, or such other subjective criteria as the
Executive Committee considered appropriate. These bonuses for 2000 are payable
in annual installments (25%, 15%, 15%, 15%, 15% and 15%) over the six calendar
year period following 2000 for participants of salary grade 12 and above, and
are payable in annual installments (50%, 25%
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and 25%) over the three calendar year period following 2000 for participants of
salary grade 11 and below, and, with certain exceptions, are forfeited if not
paid prior to termination of employment.
The Competitor Group Index used in the total stockholder return comparison
(see "Common Stock Performance Graph" below) is not used to determine any cash
bonus incentives for executives of the Company, and the peer companies
considered for purposes of the Diamond Offshore Management Bonus Program do not
necessarily correspond with the companies considered for purposes of the
Competitor Group Index. Although the two groups of companies include several of
the same companies (based on their similarity to the Company), the composition
of the two groups does not exactly correspond, and there are no specific bases
upon which certain companies included for purposes of the Competitor Group Index
are not included in the peer group for purposes of the Diamond Offshore
Management Bonus Program.
STOCK OPTION PLAN
Stock options under the Company's 2000 Stock Option Plan may be granted to
optionees selected from time to time by the Board of Directors. The purposes of
the Stock Option Plan are to allow the Company and its subsidiaries to attract
and retain qualified employees, consultants and non-employee directors, to
motivate these individuals to achieve the Company's long-term goals and to
reward them upon achievement of those goals. During 2000, 109,000 stock options
(excluding those forfeited) were granted under the Stock Option Plan. All of
these options were outstanding as of December 31, 2000.
The Board of Directors has broad authority to administer and interpret the
Stock Option Plan, including the authority to determine who will receive a grant
and to determine the specific provisions of that grant. The Board of Directors
also has the authority to accelerate the exercisability of an outstanding option
and extend the option term of an outstanding option.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
Decisions regarding compensation (salary and bonus) of the Company's Chief
Executive Officer were made by members of the Board of Directors who were
independent of management and not affiliated with the Company, its officers or
employees of the Company or its subsidiaries or of Loews or any other affiliated
companies. James S. Tisch did not participate in the preparation of
recommendations, or the review, modification or approval thereof, with respect
to his compensation. Such decision for 2000 was determined subjectively, and not
necessarily tied to corporate performance, with consideration given to Mr.
Tisch's level of responsibility and importance to the Company relative to other
Company executives, his contributions to the successful implementation of
significant strategic initiatives that are expected to benefit the Company in
future years, including the Company's capital upgrade program and on-going
rationalization of its rig fleet (purchases and sales). No fixed, relative
weights were assigned to these subjective factors.
THE BOARD OF DIRECTORS
James S. Tisch, Chairman
Lawrence R. Dickerson
Alan R. Batkin
Herbert C. Hofmann
Arthur L. Rebell
William B. Richardson
Michael H. Steinhardt
Raymond S. Troubh
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Prior to the initial public offering of the Common Stock in October 1995
(the "Initial Public Offering"), the Company was a wholly owned subsidiary of
Loews, and in connection with the Initial Public Offering, the Company and Loews
entered into agreements pursuant to which certain management, administrative and
other services are provided by Loews to the Company and certain other
obligations were assumed by the parties. These agreements were not the result of
arm's length negotiations between the parties.
SERVICES AGREEMENT. The Company and Loews entered into a services
agreement effective upon consummation of the Initial Public Offering (the
"Services Agreement") pursuant to which Loews agreed to continue to perform
certain administrative and technical services on behalf of the Company. Such
services include personnel, telecommunications, purchasing, internal auditing,
accounting, data processing and cash management services, in addition to advice
and assistance with respect to preparation of tax returns and obtaining
insurance. Under the Services Agreement, the Company is to reimburse Loews for
(i) allocated personnel costs (such as salaries, employee benefits and payroll
taxes) of the Loews personnel actually providing such services and (ii) all
out-of-pocket expenses related to the provision of such services. The Services
Agreement may be terminated at the Company's option upon 30 days' notice to
Loews and at the option of Loews upon six months' notice to the Company. In
addition, the Company has agreed to indemnify and hold harmless Loews for all
claims and damages arising from the provision of services by Loews under the
Services Agreement, unless due to the gross negligence or willful misconduct of
Loews. Under the Services Agreement, the Company paid Loews approximately
$375,500 for services performed by Loews in 2000.
REGISTRATION RIGHTS AGREEMENT. Under a Registration Rights Agreement (the
"Registration Rights Agreement") between the Company and Loews, the Company,
subject to certain limitations, will file, upon the request of Loews, one or
more registration statements under the Securities Act of 1933, as amended,
subject to a maximum of three such requests, in order to permit Loews to offer
and sell any Common Stock that Loews may hold. Loews will bear the costs of any
such registered offering, including any underwriting commissions relating to
shares it sells in any such offering, any related transfer taxes and the costs
of complying with non-U.S. securities laws, and any fees and expenses of
separate counsel and accountants retained by Loews. The Company has the right to
require Loews to delay any exercise by Loews of its rights to require
registration and other actions for a period of up to 90 days if, in the judgment
of the Company, any offering by the Company then being conducted or about to be
conducted would be adversely affected. Subject to certain conditions, the
Company has also granted Loews the right to include its Common Stock in any
registration statements covering offerings of Common Stock by the Company, and
the Company will pay all costs of such offerings other than underwriting
commissions and transfer taxes attributable to the shares sold on behalf of
Loews. The Company will indemnify Loews, and Loews will indemnify the Company,
against certain liabilities in respect of any registration statement or offering
covered by the Registration Rights Agreement, as amended.
On September 16, 1997, Loews and the Company entered into an agreement
amending the Registration Rights Agreement (the "Registration Rights Agreement
Amendment") in contemplation of the offering by Loews of its 3.125% Exchangeable
Notes due 2007 (the "Loews Notes"), which are exchangeable for Common Stock.
Pursuant to the Registration Rights Agreement Amendment, Loews exercised the
first of its three demand registration rights for the shares of Common Stock
underlying the Loews Notes and, in connection with such demand, the Company
agreed to file and to use its best efforts to cause to be effective no later
than September 30, 1998 a registration statement for a continuous offering of
such shares for delivery upon the exchange of Loews Notes, and to maintain the
effectiveness of such registration statement through September 15, 2007, or such
earlier time as no Loews Notes are outstanding. Such registration statement was
filed by the Company and was declared effective by the Commission on September
29, 1998. Pursuant to the Registration Rights Agreement Amendment, at any time
and from time to time after such registration statement has been filed and
declared effective, the Company has the right to require Loews to suspend the
use of any resale prospectus or prospectus supplement included therein for a
reasonable period of time, not to exceed 90 days in any one instance or an
aggregate of 120 days in any 12-month period, if the Company is conducting or
about to conduct an underwritten public offering of its securities for its own
account, or would be required to disclose information regarding the Company not
otherwise then required by law to be publicly
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disclosed where such disclosure would reasonably be expected to adversely affect
any material business transaction or negotiation in which the Company is then
engaged. However, no such suspension period may be in effect during the 14-day
period preceding any redemption date with respect to, or the final maturity date
of, the Loews Notes. Before giving notice to holders of Loews Notes of any
optional redemption of Loews Notes, Loews agreed in the Registration Rights
Agreement Amendment to give prior notice to the Company to enable the Company to
determine whether it should suspend the use of the current resale prospectus or
prospectus supplement covering the shares of Common Stock issuable upon the
exchange of Loews Notes. Loews and the Company agreed that Loews will not give
notice to holders of Loews Notes of the exercise of Loews's optional right to
redeem any Loews Notes during the time that any suspension period with respect
to any such prospectus or prospectus supplement is in effect.
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CUMULATIVE TOTAL STOCKHOLDER RETURN
The following graph sets forth the cumulative total stockholder return for
the Common Stock, the Standard & Poor's 500 Index and a Competitor Group Index
over the five year period ended December 31, 2000.
COMPARISON OF 1996 -- 2000 CUMULATIVE TOTAL RETURN (1)
INDEXED TOTAL STOCKHOLDER RETURN
[TO COME]
--------------------------------------------------------------------------------------------------------------------------
Dec. 29, 1995 Dec. 31, 1996 Dec. 31, 1997 Dec. 31, 1998 Dec. 31, 1999 Dec. 31, 2000
--------------------------------------------------------------------------------------------------------------------------
Company 100 169 286 143 187 248
S&P 500 100 123 164 211 255 232
Competitor Group(2) 100 154 221 105 160 218
---------------
(1) Total return assuming reinvestment of dividends. Dividends for the periods
reported include quarterly dividends of $0.125 per share of Common Stock
paid during 2000, 1999 and 1998, and of $0.07 per share of Common Stock paid
August 7, 1997 and December 1, 1997. Assumes $100 invested on December 29,
1995, in Common Stock, the S&P 500 Index and a Company-constructed
competitor group index.
(2) The Company-constructed competitor group consists of the following
companies: Baker Hughes Incorporated, ENSCO International Incorporated,
Global Marine Inc., Halliburton Company, Noble Drilling Corporation,
Schlumberger Ltd., Tidewater Marine Inc., and Transocean Sedco Forex Inc.
Total return calculations were weighted according to the respective
company's market capitalization.
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
Upon the recommendation of the Audit Committee of the Board of Directors,
none of whose members is an officer of the Company, the Board of Directors has
appointed Deloitte & Touche LLP, independent certified public accountants, as
the principal independent auditors of the Company and its subsidiaries for
fiscal year 2001, subject to ratification by stockholders at the Annual Meeting.
Deloitte & Touche LLP has served as the Company's auditors since 1989 and has no
investment in the Company or its subsidiaries. If the appointment of Deloitte &
Touche LLP is not approved or if that firm shall decline to act or their
employment is otherwise discontinued, the Board of Directors will appoint other
independent auditors.
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AUDIT FEES. The aggregate fees, including expenses reimbursed, billed by
Deloitte & Touche LLP, the member firms of Deloitte & Touche Tohmatsu, and their
respective affiliates (collectively, "Deloitte") for professional services
rendered for the audit of the Company's annual financial statements for the
fiscal year ended 2000 and for the reviews of the financial statements included
in the Company's Quarterly Reports on Form 10-Q for that fiscal year were
$221,000.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES. There were
no services rendered to the Company or its subsidiaries by the Company's
principal auditors for information technology services relating to financial
information systems design and implementation for 2000.
ALL OTHER FEES. The aggregate fees, including expenses reimbursed, billed
by Deloitte for services rendered to the Company, other than the services
described above under "Audit Fees" and "Financial Information Systems Design and
Implementation Fees," for the fiscal year ended 2000 were $89,000.
The Audit Committee has considered whether the provision of non-audit
services is compatible with maintaining the principal accountant's independence.
It is expected that representatives of Deloitte & Touche LLP will be
present at the Annual Meeting with an opportunity to make a statement should
they desire to do so and will be available to respond to appropriate questions
from stockholders.
SOLICITATION EXPENSES
The Company will bear the cost of preparing, printing and mailing this
Proxy Statement and the accompanying proxy card and of this solicitation of
proxies on behalf of the Company's Board of Directors. In addition to
solicitation by mail, proxies may be solicited personally, by telephone or other
means. Brokerage houses and other custodians and nominees will be asked whether
other persons are beneficial owners of the shares of Common Stock which they
hold of record, and, if so, they will be supplied with additional copies of the
proxy materials for distribution to such beneficial owners. The Company will
reimburse banks, nominees, brokers and other custodians for the reasonable costs
of sending the proxy materials to the beneficial owners of the Common Stock.
STOCKHOLDER PROPOSALS
Stockholder proposals intended for inclusion in the Proxy Statement to be
issued in connection with the Company's 2002 annual meeting of stockholders must
be addressed to: William C. Long, Corporate Secretary, Diamond Offshore
Drilling, Inc., 15415 Katy Freeway, Houston, Texas 77094, and must be received
no later than December 6, 2001.
Stockholder proposals submitted outside of the Commission's procedures for
including such proposals in the Company's Proxy Statement must be mailed or
delivered to the attention of the Corporate Secretary at the address above and
must be received by the Company's Corporate Secretary no later than December 6,
2001, except that, with respect to nominations of one or more persons for
election as directors, written notice of the stockholder's intent to make such
nomination(s), which notice must comply in all respects with the requirements
therefor set forth in the Company's bylaws, must be mailed or delivered to the
attention of the Corporate Secretary at the address above and must be received
by the Company's Corporate Secretary no later than February 22, 2002. If a
proposal or notice of nomination is received after such respective date, the
Company's proxy for the 2002 annual meeting of stockholders may confer
discretionary authority to vote on such matter without any discussion of such
matter in the Proxy Statement for the 2002 annual meeting of stockholders.
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OTHER MATTERS
While management has no reason to believe that any other business will be
presented, if any other matters should properly come before the Annual Meeting,
the proxies will be voted as to such matters in accordance with the best
judgment of the proxy holders.
By Order of the Board of Directors
/s/ WILLIAM C. LONG
WILLIAM C. LONG
Vice President, General Counsel and
Secretary
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EXHIBIT A
DIAMOND OFFSHORE DRILLING, INC.
AUDIT COMMITTEE CHARTER
PURPOSE
The primary purpose of the Audit Committee (the "Committee") is to assist
the Board of Directors (the "Board") in fulfilling its responsibility to oversee
management's conduct of the Company's financial reporting process, including
review of the financial reports and other financial information provided by the
Company to governmental and regulatory bodies, the Company's systems of internal
accounting, the Company's financial controls, and the annual independent audit
of the Company's financial statements.
In discharging its role, the Committee is empowered to investigate any
matter brought to its attention, with full access to all books, records,
facilities and personnel of the Company and the power to retain outside counsel,
auditors or other experts for this purpose. The Board and the Committee are in
place to represent the Company's shareholders; and, accordingly, the independent
auditors are ultimately accountable to the Board and to the Committee.
The Committee will review the adequacy of this Charter on an annual basis.
MEMBERSHIP
The Committee will be comprised of not less than three members of the Board,
and the Committee's composition will meet the requirements of the Audit
Committee Policy of the New York Stock Exchange.
Accordingly, all the members will be directors:
o who, in the judgment of the Board, have no relationship to the Company that
may interfere with the exercise of their independence from management and
the Company; and
o who, in the judgment of the Board, are financially literate or who become
financially literate within a reasonable period of time after appointment
to the Committee. At least one member of the Committee will have accounting
or related financial management expertise, as the Board interprets such
qualification in its business judgment.
KEY RESPONSIBILITIES
The Committee's job is one of review and it recognizes that the Company's
management is responsible for preparing the Company's financial statements and
that the independent auditors are responsible for auditing those financial
statements. Additionally, the Committee recognizes that financial management and
the independent auditors have more time, knowledge and detailed information
concerning the Company than do Committee members. Consequently, in performing
its functions, the Committee is not providing any expert or special assurance as
to the Company's financial statements or any professional certification as to
the independent auditors' work.
The following functions will be the common recurring activities of the
Committee. These functions are set forth as a guide with the understanding that
the Committee may diverge from this guide as appropriate given the
circumstances.
o The Committee will review with management and the independent auditors the
audited financial statements to be included in the Company's Annual Report
on Form 10-K and review and consider with the independent auditors the
matters required to be discussed by Statement of Auditing Standards No. 61,
as it may be modified or supplemented.
20
o As a whole, or through the Committee chair, the Committee will review with
the independent auditors the Company's interim financial results.
o The Committee will discuss with management and the independent auditors the
quality and adequacy of the Company's internal controls.
o The Committee shall:
1. request from the independent auditors annually, a formal written
statement delineating all relationships between the auditors and
the Company consistent with Independence Standards Board Standard
Number 1;
2. discuss with the independent auditors any such disclosed
relationships and their impact on the auditors' independence; and
3. recommend that the Board take appropriate action in response to
the independent auditors' report to satisfy itself of the
auditors' independence.
o The Committee and the Board will have the ultimate authority and
responsibility to select, evaluate and, where appropriate, replace the
independent auditors (or to nominate the independent auditors to be
proposed for shareholder approval in any proxy statement).
While the Committee has the responsibilities and powers set forth in this
Charter, it is not the duty of the Committee to plan or conduct audits or to
determine that the Company's financial statements are complete and accurate and
are in accordance with generally accepted accounting principles. This is the
responsibility of management and the independent auditors. Nor is it the duty of
the Committee to conduct investigations, to resolve disagreements, if any,
between management and the independent auditors or to assure compliance with
laws and regulations and the Company's policies.
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[DIAMOND LOGO]
C/O PROXY SERVICES
P.O. BOX 9141
FARMINGDALE, NY 11735
VOTE BY INTERNET - www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic
delivery of information. Have your proxy card in hand when you access the web
site. You will be prompted to enter your 12-digit Control Number which is
located below to obtain your records and create an electronic voting instruction
form.
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions. Have your
proxy card in hand when you call. You will be prompted to enter your 12-digit
Control Number which is located below and then follow the simple instructions
the Vote Voice provides you.
VOTE BY MAIL -
Mark, sign and date your proxy card and return it in the postage-paid envelope
we've provided or return to Diamond Offshore Drilling, Inc., c/o ADP, 51
Mercedes Way, Edgewood, NY 11717.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: DIMND1 KEEP THIS PORTION FOR YOUR RECORDS
-----------------------------------------------------------------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
===================================================================================================================================
DIAMOND OFFSHORE DRILLING, INC.
1. ELECTION OF DIRECTORS
NOMINEES: 01) James S. Tisch, 02) Lawrence R. Dickerson, FOR WITHHOLD FOR ALL To withhold authority to vote,
03) Alan R. Batkin, 04) Herbert C. Hofmann, 05) Arthur L. Rebell, ALL ALL EXCEPT mark "For All Except" and write
06) William B. Richardson, 07) Michael H. Steinhardt and [ ] [ ] [ ] the nominee's number on the line
08) Raymond S. Troubh below.
VOTE ON PROPOSAL --------------------------------
2. Proposal to ratify the appointment of Deloitte & Touche LLP as the FOR AGAINST ABSTAIN
independent Public Accountants of the Company for fiscal year 2001. [ ] [ ] [ ]
3. In their discretion, upon such other matters that may properly come before
the meeting and any adjournments or postponements thereof.
Please sign exactly as your name appears on this Proxy Card. When signing as
attorney, executor, administrator, trustee, guardian or corporate or partnership
official, please give full title as such and the full name of the entity on
behalf of whom you are signing. If a partnership, please sign in partnership
name by authorized person.
---------------------------------- ------- ----------------------- --------
---------------------------------- ------- ----------------------- --------
Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
===================================================================================================================================
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DIAMOND OFFSHORE DRILLING, INC.
COMMON
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE
2001 ANNUAL MEETING OF STOCKHOLDERS ON MAY 23, 2001
The undersigned hereby appoints Lawrence R. Dickerson, William C. Long and Gary
T. Krenek and any one of them, and any substitute or substitutes, to be the
attorneys and proxies of the undersigned at the 2001 Annual Meeting of
Stockholders of Diamond Offshore Drilling, Inc. (the "Company") to be held at
the Regency Hotel, 540 Park Avenue, New York, New York 10021 at 11:30 a.m. local
time, and at any adjournments or postponements of said meeting, and to vote at
such meeting the shares of stock the undersigned held of record on the books of
the Company on the record date for the meeting.
This proxy, when properly executed, will be voted in the manner directed herein
by the undersigned stockholder. If no direction is made, this Proxy will be
voted FOR all nominees as directors, FOR the proposal to ratify the appointment
of Deloitte & Touche LLP as the independent accountants of the Company for
fiscal year 2001 and in accordance with the discretion of the persons designated
above with respect to any other business that may properly come before the
meeting.