2018 Proxy Statement

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2018 Proxy Statement Ensco plc 6 Chesterfield Gardens London, W1J 5BQ Phone: +44 (0) 20 7659 4660 www.enscoplc.com Company No. 7023598 NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS to be held on 21 May 2018 The Annual General Meeting of Shareholders of Ensco plc ("Ensco," "we," "us," "our" or the "Company") will be held at the Serpentine Suite of the London Hilton on Park Lane, 22 Park Lane, London, W1K 1BE, United Kingdom, at 8:00 a.m. London time, on Monday 21 May 2018 (the "Meeting"). You will be asked to consider and to pass the resolutions below. Resolutions 11 and 12 will be proposed as special resolutions. All other resolutions will be proposed as ordinary resolutions. ORDINARY RESOLUTIONS 1. To re-elect, by way of separate ordinary resolutions, the eleven Directors named in the accompanying proxy statement to serve until the 2019 Annual General Meeting of Shareholders. 2. To ratify the Audit Committee's appointment of KPMG LLP (U.S.) as our U.S. independent registered public accounting firm for the year ending 31 December 2018. 3. To appoint KPMG LLP (U.K.) as our U.K. statutory auditors under the U.K. Companies Act 2006 (to hold office from the conclusion of the Meeting until the conclusion of the next Annual General Meeting of Shareholders at which accounts are laid before the Company). 4. To authorise the Audit Committee to determine our U.K. statutory auditors' remuneration. 5. To approve the Ensco plc 2018 Long-Term Incentive Plan. 6. To cast a non-binding advisory vote to approve the Directors' Remuneration Report for the year ended 31 December 2017 (excluding the Directors' Remuneration Policy). 7. To cast a non-binding advisory vote to approve the compensation of our named executive officers. 8. To cast a non-binding advisory vote to approve the reports of the auditors and the directors and the U.K. statutory accounts for the year ended 31 December 2017. 9. To (i) approve the terms of the proposed purchase agreement or agreements providing for the purchase by the Company of up to 65.0 million shares for up to a maximum of $500.0 million in aggregate from one or more financial intermediaries and (ii) authorise the Company to make off-market purchases of shares pursuant to such agreement or agreements, the full text of which can be found in "Resolution 9" of the accompanying proxy statement. The authority conferred by "Resolution 9" will, unless varied, revoked or renewed by the shareholders prior to such time, expire five years after the date of the passing of this resolution. 10. To authorise the Board of Directors to allot shares, the full text of which can be found in "Resolution 10" of the accompanying proxy statement. SPECIAL RESOLUTIONS 11. To approve the general disapplication of pre-emption rights, the full text of which can be found in "Resolution 11" of the accompanying proxy statement. 12. To approve the disapplication of pre-emption rights in connection with an acquisition or specified capital investment, the full text of which can be found in "Resolution 12" of the accompanying proxy statement. Resolutions 1 through 10 will be proposed as ordinary resolutions, which means, assuming a quorum is present, each of Resolutions 1 through 10 will be approved if a simple majority of the votes cast are cast in favour thereof. Resolutions 11 and 12 will be proposed as special resolutions, which means, assuming a quorum is present, each of Resolutions 11 and 12 will be approved if 75% of the votes cast are cast in favour thereof. With respect to the non-binding, advisory votes on Resolutions 6, 7 and 8, regarding the Directors' Remuneration Report, the compensation of our named executive officers and the U.K. statutory reports and accounts, the result of the vote will not require the Board of Directors or any committee thereof to take any action. However, our Board of Directors values the opinions of our shareholders as expressed through their advisory votes on such non-binding resolutions and other communications. Accordingly, the Board of Directors will carefully consider the outcome of the advisory votes on Resolutions 6, 7 and 8. Please review the proxy statement accompanying this notice for more complete information regarding the Meeting and the full text of the resolutions to be proposed at the Meeting. By Order of the Board of Directors, Michael T. McGuinty Senior Vice President, General Counsel and Secretary 30 March 2018 YOUR VOTE IS IMPORTANT. FOR SPECIFIC INSTRUCTIONS ON VOTING, PLEASE REFER TO THE INSTRUCTIONS INCLUDED WITH THE NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIALS OR THE PROXY CARD INCLUDED WITH THE PROXY MATERIALS. TABLE OF CONTENTS PROXY STATEMENT SUMMARY 1 QUESTIONS AND ANSWERS ABOUT THE MEETING AND VOTING 5 OWNERSHIP OF VOTING SECURITIES 12 RESOLUTIONS 1a. - 1k. 13 RESOLUTIONS 2, 3, AND 4 18 CORPORATE GOVERNANCE 20 REPORT OF THE AUDIT COMMITTEE 26 COMPENSATION COMMITTEE REPORT 27 COMPENSATION DISCUSSION AND ANALYSIS 28 EXECUTIVE COMPENSATION 55 Summary Compensation Table 55 All Other Compensation Table 58 Grants of Plan-Based Awards Table 59 Outstanding Equity Awards at Fiscal Year-End Table 60 Option Exercises and Shares Vested Table 61 Nonqualified Deferred Compensation Table 62 Potential Payments Upon Termination or Change in Control 62 Pay Ratio Disclosure 68 Director Compensation 69 RESOLUTION 5 71 RESOLUTION 6 80 RESOLUTION 7 81 RESOLUTION 8 81 RESOLUTION 9 82 RESOLUTION 10 83 RESOLUTIONS 11 AND 12 85 GENERAL AND OTHER MATTERS 86 SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE 87 HOUSEHOLDING OF SHAREHOLDER MATERIALS 87 IMPORTANT NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL GENERAL MEETING OF SHAREHOLDERS TO BE HELD ON 21 MAY 2018 87 INFORMATION CONCERNING SHAREHOLDER PROPOSALS FOR THE 2018 ANNUAL GENERAL MEETING OF SHAREHOLDERS 88 OTHER MATTERS 89 Annex 1 - Directors' Reports Annex 1 - 1 Annex 2 - Ensco plc 2018 Long Term Incentive Plan Annex 2 - 1 PROXY STATEMENT SUMMARY This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all of the information you should consider, and you should read the entire proxy statement carefully before voting. For more complete information regarding our 2017 fiscal performance, please review our annual report on Form 10-K for the period ended 31 December 2017. This proxy statement, our 2017 annual report and a proxy card are first being sent or distributed to shareholders on or about 9 April 2018. 2018 Annual General Meeting of Shareholders Time and Date: 8:00 a.m. London time Place: Serpentine Suite of the London Hilton on Park Lane, 22 Park Lane, London, W1K 1BE, United Kingdom Meeting Date: 21 May 2018 Record Date: 26 March 2018 Voting Cutoff Date: 3:00 p.m. Eastern Time on 18 May 2018 11:59 p.m. Eastern Time on 15 May 2018 for shares held in the Ensco Savings Plan Voting Matters and Board Recommendations Re-election of Directors FOR each Nominee Ratify KPMG LLP (U.S.) as U.S. Independent Auditors FOR Appoint KPMG LLP (U.K.) as U.K. Statutory Auditors FOR Authorise the U.K. Statutory Auditors' Remuneration FOR Approve the Ensco plc 2018 Long-Term Incentive Plan FOR Advisory Vote to Approve the Directors' Remuneration Report FOR Advisory Vote to Approve Named Executive Officer Compensation FOR Advisory Vote to Approve the U.K. Statutory Accounts FOR Authorise Share Repurchase Program FOR Authorise the Board of Directors to Allot Shares FOR Special Resolution to Approve the General Disapplication of Pre-emption Rights FOR Special Resolution to Approve the Disapplication of Pre-emption Rights in FOR connection with an acquisition or specified capital investment 1 Board Nominees Director Independent Name Age Since Principal Occupation Committees (Yes/No) J. Roderick Clark 67 2008 Former President and Chief Operating Officer Compensation Yes of Baker Hughes Incorporated (Retired) Roxanne J. Decyk 65 2013 Former Executive Vice President of Global Compensation Yes Government Relations for Royal Dutch Shell plc (Retired) Mary E. Francis CBE 69 2013 Former Senior Civil Servant in British Audit; Yes Treasury and Prime Minister's Office (Retired) Nominating and Governance C. Christopher Gaut 61 2008 Chairman of Forum Energy Technologies, Inc. Nominating and Yes Governance Jack E. Golden 69 2017 Managing Partner of Edgewater Energy LLC Yes Gerald W. Haddock 70 1986 President and Founder of Haddock Audit; Yes Enterprises, LLC Nominating and Governance Francis S. Kalman 70 2011 Former Executive Vice President of Audit; Yes McDermott International, Inc. (Retired) Compensation Keith O. Rattie 64 2008 Former Chairman, President and Chief Audit Yes Executive Officer of Questar Corporation and Former Chairman of QEP Resources (Retired) Paul E. Rowsey, III 63 2000 Former Chief Executive Officer of Compatriot Nominating and Yes Capital, Inc. (Retired) Governance Carl G. Trowell 49 2014 President and Chief Executive Officer of No Ensco plc Phil D. Wedemeyer 68 2017 Former Partner of Grant Thornton LLP Yes (Retired) 2017 Business Overview During 2017, Ensco and its peers in the offshore drilling industry continued to face headwinds from an unprecedented industry downturn. Depressed oil prices as compared to 2014 highs have caused: • Significant decline in the demand for offshore drilling services as many of our customers' projects became uneconomical; • Substantial reduction to customer capital expenditures for offshore projects and cancelled or deferred existing drilling programs, resulting in drilling contract cancellations, fewer market tenders and scarce new drilling contracts; and • Oversupply of rigs, which combined with the above, has resulted in significantly reduced day rates and utilisation across the offshore drilling sector. Onshore drillers experienced better stock price performance due to improved commodity prices during 2017, but the offshore drilling sector continues to lag. Commodity prices have not improved enough to support the offshore activity levels needed to absorb the existing oversupply of rigs, resulting in continued pressure on offshore day rates.
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