Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Compensatory Arrangements
Effective as ofFebruary 25, 2022 , the Compensation Committee (the "Compensation Committee") of the Board granted awards of performance units and restricted stock units under Oceaneering's 2020 Incentive Plan (the "Incentive Plan") to various employees, including Oceaneering's executive officers. The following table sets forth information regarding the performance units and restricted stock units awarded to each of the below-indicated continuing executive officers of Oceaneering listed in the "Summary Compensation Table" in Oceaneering's proxy statement for its 2021 annual meeting of shareholders as a named executive officer (the "Named Executive Officers"), as well as to Mr.Martin J. McDonald , who is expected to be listed as a named executive officer in Oceaneering's proxy statement for its 2022 annual meeting of shareholders. Mr.Charles W. Davison , who was a named executive officer in 2021, is omitted from the following table due to his departure from the Company inJune 2021 . Number of Number of Performance Restricted Stock Name and Position Units (1)(2) Units (1)(3) Roderick A. Larson 21,660 104,185
President and Chief Executive Officer and Director
7,046 33,889 Senior Vice President and Chief Financial Officer David K. Lawrence 4,500 21,645
Senior Vice President, General Counsel and Secretary
3,366 16,190
Senior Vice President and Chief Transformation Officer
3,136 15,086
Senior Vice President, Subsea Robotics
(1) The performance units and restricted stock units are scheduled to vest in full on the third anniversary of the award date, subject to earlier vesting on: (a) an employee's attainment of Retirement Age (as defined in Exhibits 10.1 and 10.2), resulting in vesting on a pro-rata basis over three years, which in the case ofMr. Lawrence , began in 2020; or (b) the termination or constructive termination of an employee's employment in connection with a change of control or due to death or disability. (2) The number of performance units shown represents units with an initial notional value of$100 and is not equivalent to a number of shares of Oceaneering common stock. The Compensation Committee has approved specific financial goals and performance measures based on Cumulative Adjusted EBITDA and relative Total Shareholder Return, or TSR, for the three-year period fromJanuary 1, 2022 throughDecember 31, 2024 , to be used as the basis for the final value of the performance units awarded under the Incentive Plan. Cumulative Adjusted EBITDA and relative TSR are to be determined in accordance with the award agreement, and the final value of each performance unitmay 1 --------------------------------------------------------------------------------
range from
(3) Each restricted stock unit represents the equivalent of one share of Oceaneering common stock. Settlement of the restricted stock units will be made in shares of Oceaneering common stock.
In addition, effectiveFebruary 25, 2022 , the Board: (1) granted awards of 11,905 shares of restricted stock under the Incentive Plan to each of the following nonemployee directors of Oceaneering: Ms.Karen H. Beachy , Mr.William B. Berry , Ms.Deanna L. Goodwin , Mr.M. Kevin McEvoy , Mr.Paul B. Murphy , Jr., Mr.Jon Erik Reinhardsen , Dr.Kavitha Velusamy and Mr.Steven A. Webster ; and (2) granted an award of 17,677 shares of restricted stock under the Incentive Plan to Mr.T. Jay Collins , Chairman of the Board. The restricted stock awards are scheduled to vest in full on the first anniversary of the award date, provided that all awards are subject to: (a) earlier vesting on a change of control or the termination of the director's service due to death or disability; and (b) such other terms as are set forth in the award agreements. Annual cash retainers for Oceaneering's nonemployee directors were continued for 2022 without change from 2021. All cash retainers are payable on a quarterly basis. The 2022 base cash retainer is$105,000 forMr. Collins , as Chairman, and$70,000 for each of our other nonemployee directors. Base cash retainers are supplemented by cash retainers payable to the chairs and members of the committees of the Board at annual amounts, respectively, of$30,000 and$10,000 for the Audit Committee,$20,000 and$10,000 for the Compensation Committee, and$10,000 and$5,000 for theNominating, Corporate Governance and Sustainability Committee . In addition, the Compensation Committee approved: (1) the form of 2022 Performance Unit Agreement, including 2022 Performance Award: Goals and Measures, that will govern the terms and conditions of the performance unit awards made to Oceaneering's executive officers and other employees; and (2) the form of 2022 Restricted Stock Unit Agreement that will govern the terms and conditions of restricted stock unit awards made to Oceaneering's executive officers and other employees. The Board approved the forms of Nonemployee Director Restricted Stock Agreement that will govern the terms and conditions of restricted stock awards made to Oceaneering's nonemployee directors.
The foregoing descriptions of the awards under the Incentive Plan are not complete and are qualified by reference to the complete forms of agreement (the "2022 LTIP Forms"), which are attached as exhibits to this report and incorporated by reference into this Item.
Effective as ofFebruary 25, 2022 , the Compensation Committee approved the payment of bonuses awarded in 2021 under Oceaneering's Incentive Plan to various employees, including the Named Executive Officers andMr. McDonald . The Compensation Committee had previously established performance goals for the year endingDecember 31, 2021 to be used as the basis for determining the final value, if any, of annual cash bonus awards approved under the Incentive Plan (the "2021 Bonus Program"). For executive officers, achievement was determined by reference to Adjusted EBITDA, Free Cash Flow and safety performance measures, for the year endedDecember 31, 2021 . In determining Adjusted EBITDA for 2021 and following the recommendation of our executive management team, the Compensation Committee exercised its interpretive authority under the Incentive Plan and applied discretion to effectively reduce the impact of certain asset write-offs on the determination of Adjusted 2 -------------------------------------------------------------------------------- EBITDA, and thereby reduce the amounts that otherwise would have been paid with respect to the 2021 Bonus Program awards, by an aggregate of approximately$3.8 million . The following table summarizes the payments approved under the 2021 Bonus Program for the Named Executive Officers andMr. McDonald : Name 2021 Bonus Program Amount Roderick A. Larson $ 1,203,175 Alan R. Curtis $ 405,597 David K. Lawrence $ 356,203 Eric A. Silva $ 355,253 Martin J. McDonald $ 319,601
Effective as of
Name 2022 Base Salary Roderick A. Larson $ 760,000 Alan R. Curtis $ 427,000 David K. Lawrence $ 375,000 Eric A. Silva $ 374,000 Martin J. McDonald $ 360,500 Effective as ofFebruary 25, 2022 , the Compensation Committee approved a performance-based annual cash bonus awards program under the Incentive Plan for the year endingDecember 31, 2022 (the "2022 Bonus Program"). Bonuses under the 2022 Bonus Program for executive officers will be based 60% on Adjusted EBITDA, 25% on Free Cash Flow, 10% on safety performance measures and 5% on environmental measures for the year endingDecember 31, 2022 . Under this program, the target and maximum possible bonuses for the Named Executive Officers andMr. McDonald , each as a percentage of such officer's base salary for 2022, are as follows: Target Bonus as a Maximum Bonus as a Name Percentage of Base Salary Percentage of Base Salary Roderick A. Larson 125 % 235 % Alan R. Curtis 75 % 141 % David K. Lawrence 75 % 141 % Eric A. Silva 75 % 141 % Martin J. McDonald 70 % 132 %
A summary of the 2022 Bonus Program is attached as an exhibit to this report and incorporated by reference into this Item.
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