PACD Pacific Drilling SA

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.)

Filed by the Registrant ☒ Filed by a Party other than the Registrant ☐

Check the appropriate box:

PACIFIC DRILLING S.A.

(Name of Registrant as Specified in its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

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Certain Effects of our Recent Emergence from Bankruptcy‌16

Board Diversity‌17

Board Tenure and Refreshment‌17

Audit Committee‌18

Compensation Committee‌19

Nominating and Corporate Governance Committee‌19

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2019 Summary Compensation Table‌48

2019 Grants of Plan-Based Awards‌50

Outstanding Equity Awards at December 31, 2019‌51

Stock Vested During 2019‌52

Potential Payments Upon Termination or Change of Control‌52

CEO Pay Ratio‌57

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Proxy Statement Summary

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This summary highlights selected information contained elsewhere in this proxy statement. This summary does not contain all of the information that you should consider, and you should read the entire proxy statement carefully before submitting voting instructions for your shares. For more information regarding our 2019 financial and operational performance, please review our 2019 annual report to shareholders (“2019 annual report”). The 2019 annual report, including financial statements, is first being made available to shareholders together with this proxy statement on or about April 20, 2020.

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Corporate Governance Highlights

We are committed to strong and effective governance practices that promote and protect the interests of our shareholders. Our commitment to good corporate governance is illustrated by the following highlights:

Six of seven
director nominees are
independent

100% independent audit,
compensation and nominating
and corporate governance
committees

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Chairman and CEO roles
are separate

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Recent board refreshment

Annual election of directors
by majority vote

Clawback policy in place

Robust board governance
guidelines and business
code of conduct

Committed to considering
gender and racial/ethnic
diversity as important factors
in Board composition

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No shareholders’ rights plan
(poison pill)

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Annual board
and committee
performance evaluations

Stock ownership guidelines
for directors and
executive officers

Independent directors
regularly meet in
executive session without
management present

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2020 Compensation Decisions

Effective April 1, 2020, in light of the current business environment as impacted by COVID-19, we implemented a Company-wide salary reduction initiative, which reduced the base salaries of all of our executive officers by10%. The Board and the Compensation Committee will continue to consider the evolving impacts of this global health crisis when reviewing our 2020 executive compensation program and may take further steps they deem appropriate in response to the  economic environment. In addition, in support of the Company-wide base salary reductions, effective April 1, 2020, the Board approved a 10% reduction in the Class A director retainer fees.

2019 Performance Highlights

Following our emergence from bankruptcy in November 2018, our management team focused on cost control and process optimization while delivering safe, efficient and reliable services to our customers. At the beginning of 2019, we had three rigs working, and four rigs smart-stacked. During 2019, despite our recent emergence from bankruptcy, we successfully reactivated one of our smart-stacked rigs, won work from a new customer and entered into a commitment letter for a new $50 million revolving credit facility that we closed in early 2020. Specifically, we accomplished the following:

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Executive Compensation Highlights

Following our emergence from bankruptcy, our Compensation Committee re-evaluated our executive compensation program and recommended, and the Board approved, the following initiatives:

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Adopted
2018 Omnibus Stock
Incentive Plan

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Cancelled all equity and
equity-based awards
granted under the
2011 Omnibus Stock
Incentive Plan

Adopted a goal-driven
annual incentive plan,
based on both financial
and operational goals

Adopted
stock ownership
guidelines

Strengthened
anti-hedging and
pledging policies

Adopted
clawback
policy

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We are committed to developing and maintaining executive compensation practices that enhance the performance of the Company and long-term value for its shareholders. As a result of a Governance Agreement with our major shareholders discussed elsewhere herein, holders of approximately 79% of our outstanding common shares have direct input into our executive compensation program through their director nominees on our Board.

Certain Proposals Mandated by Luxembourg Law

Certain proposals on which you are being asked to vote are customary or required for public limited liability companies (société anonyme) incorporated under Luxembourg law to present to shareholders at each annual general meeting. These proposals may be unfamiliar to shareholders accustomed to proxy statements for companies organized in other jurisdictions. Specifically, proposals no. 1, 2, 3, 4, 5, 6, 7, 8 and 11 are customary proposals or required by Luxembourg law. Similar proposals were presented to shareholders and approved at prior annual general meetings.

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Proposal No. 1: Approval of the stand-alone audited and unconsolidated annual accounts of the Company for the financial period from 1 January 2019 to 31 December 2019 prepared in accordance with Luxembourg Generally Accepted Accounting Principles and the laws and regulations of the Grand-Duchy of Luxembourg (the “Annual Accounts”)

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Pursuant to Luxembourg law, the Annual Accounts must be submitted each year to the shareholders for approval at the Annual General Meeting.

The Annual Accounts are prepared in accordance with Luxembourg GAAP and consist of a balance sheet, a profit and loss account and the accompanying notes, for the unconsolidated Pacific Drilling S.A. entity. There is no statement of shareholders’ equity or statement of cash flows included in the Annual Accounts under Luxembourg generally accepted accounting principles. Profits earned by the subsidiaries of Pacific Drilling S.A. are not included in the Annual Accounts unless such amounts are distributed to Pacific Drilling S.A.

The Annual Accounts, together with the report of the independent auditor on such Annual Accounts, KPMG Luxembourg, Réviseur d’entreprises agréé (“KPMG Luxembourg”), are available, along with this proxy statement and 2019 annual report to shareholders, on the website address on the first page of this proxy statement under the heading “Important Notice Regarding the Availability of Proxy Materials for the Annual General Meeting of Shareholders to be Held on June 2, 2020.” The Annual Accounts, together with the report of KPMG Luxembourg, are also available on the Company’s website at www.pacificdrilling.com in the “Events and Presentations” subsection of the “Investor Relations” page; and at the Registered Office of the Company in Luxembourg beginning 15 days before the Annual General Meeting until the date of the Annual General Meeting. Copies of the Annual Accounts and the relevant audit report will also be sent to any shareholder free of charge upon request in accordance with article 461-6 of the Luxembourg law of 10 August 1915 on commercial companies (the “Law”).

Vote Required

Approval of this proposal requires the affirmative vote of a majority of the votes cast on the proposal. For more information on the voting requirements, see “Questions and Answers about the Proxy Materials, Annual Meeting and Voting.”

Recommendation of the Board of Directors

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Proposal No. 2: Approval of the consolidated financial statements of the Company for the financial period from 1 January 2019 to 31 December 2019 prepared in accordance with United States Generally Accepted Accounting Principles (the “Consolidated Financial Statements”)

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Pursuant to Luxembourg law, the Consolidated Financial Statements must be submitted each year to shareholders for approval at the Annual General Meeting.

The Consolidated Financial Statements are prepared in accordance with U.S. GAAP, including a footnote reconciliation between the U.S. GAAP equity position and Luxembourg GAAP, and consist of consolidated statements of operations, consolidated statements of comprehensive income (loss), consolidated balance sheets, consolidated statements of shareholders’ equity, and the accompanying notes. The Consolidated Financial Statements present the financial position and results of operations for the Company and all of its consolidated subsidiaries.

The Consolidated Financial Statements, together with the reports from each of the Board and the independent auditor included with such Consolidated Financial Statements, KPMG Luxembourg, are available, along with this proxy statement and 2019 annual report to shareholders, on the website address on the first page of this proxy statement under the heading “Important Notice Regarding the Availability of Proxy Materials for the Annual General Meeting of Shareholders to be Held on June 2, 2020.” The Consolidated Financial Statements, together with the reports of the Board and of KPMG Luxembourg, are also available on the Company’s website at www.pacificdrilling.com in the “Events and Presentations” subsection of the “Investor Relations” page, and at the Registered Office of the Company in Luxembourg beginning 15 days before the Annual General Meeting until the date of the Annual General Meeting. Copies of the Consolidated Financial Statements and the reports from each of the Board and the independent auditor will also be sent to any shareholder free of charge upon request in accordance with article 461-6 of the Law.

Vote Required

Approval of this proposal requires the affirmative vote of a majority of the votes cast on the proposal. For more information on the voting requirements, see “Questions and Answers about the Proxy Materials, Annual Meeting and Voting.”

Recommendation of the Board of Directors

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Proposal No. 3: Allocation of the result shown in the Annual Accounts for the financial period from 1 January 2019 to 31 December 2019

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Each year, the shareholders of the Company are required by Luxembourg law to approve the allocation of the results of the unconsolidated Pacific Drilling S.A. entity, as determined by the Annual Accounts.

Article 461-1 of the Law requires that at least 5% of the profits, if any, shown by the Annual Accounts be allocated to a legal reserve; provided however that an allocation ceases to be compulsory when the legal reserve reaches 10% of the share capital of the Company, but again becomes compulsory when the reserve amount falls below this threshold. Pursuant to Luxembourg law, Article 16.2 of the Company’s Articles of Association (the “Articles”) provides that the shareholders determine at a general meeting the allocation of the annual profits not required to be allocated to the legal reserve.

As of December 31, 2019, the Annual Accounts reflect total assets of $2,054,795,103.00 and a loss for the year then ended of $(563,263,827.00). As noted in Proposal No. 1, profits earned by subsidiaries of Pacific Drilling S.A. are not included in the calculation of profits for the Annual Accounts unless such profits have been distributed to the Company.

The Board proposes to allocate the loss of $(563,263,827.00) reflected in the Annual Accounts to be carried forward.

Vote Required

Approval of this proposal requires the affirmative vote of a majority of the votes cast on the proposal. For more information on the voting requirements, see “Questions and Answers about the Proxy Materials, Annual Meeting and Voting.”

Recommendation of the Board of Directors

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Proposal No. 4: Granting of full discharge of liability (quitus) to the current directors of the Company for their exercise of their mandates as directors of the Company in relation to the financial period from 1 January 2019 to 31 December 2019

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In accordance with Article 461-7 of the Law, upon approval of the Company’s Annual Accounts and Consolidated Financial Statements, the shareholders must vote as to whether to discharge those who were members of the Board during the fiscal year ended December 31, 2019 from any liability in connection with their mandates for the fiscal year.

If the shareholders grant the discharge for the relevant period, shareholders will not be able to initiate a liability claim against such directors in connection with the performance of their mandates for such period. However, such discharge will be valid only if the Annual Accounts and the Consolidated Financial Statements contain no omission or false information concealing the true situation of the Company, and with regard to any acts carried out which fall outside the scope of the Articles, only if they have been specifically indicated in the convening notice for the Annual General Meeting. For the fiscal year ended December 31, 2019, the Company believes no such instances that would invalidate the discharge have occurred.

The Board recommends that the shareholders grant the full discharge of liability to the current directors of the Company for the exercise of their mandates as directors of the Company in relation to the financial period from 1 January 2019 to 31 December 2019.

Vote Required

Approval of this proposal requires the affirmative vote of a majority of the votes cast on the proposal. For more information on the voting requirements, see “Questions and Answers about the Proxy Materials, Annual Meeting and Voting.”

Recommendation of the Board of Directors

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Proposal No. 5: Acknowledgement of the resignations of Messrs. Daniel Han and Edward H. Burdick as Class B directors with effect on November 21, 2019 and February 18, 2020, respectively, and the granting of full discharge of liability to each of them for the exercise of their mandates as directors of the Company through their respective resignation dates

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On November 21, 2019, Daniel Han tendered his resignation as a Class B director effective immediately. Mr. Han joined the Board on November 19, 2018, having been appointed for election as a Class B director by Strategic Value Partners, LLC (“SVP”), pursuant to the Governance Agreement, dated as of November 19, 2018 by and among the Company and certain holders of its common shares, including SVP (the “Governance Agreement”).

Under the terms of the Governance Agreement, SVP has the exclusive right to nominate a replacement for Mr. Han, and pursuant to that right, nominated Edward H. Burdick to fill the vacancy created by Mr. Han’s resignation. On November 21, 2019, the Board co-opted Mr. Burdick to fill the vacancy on the Board created by Mr. Han’s resignation and to serve as a Class B director for the remainder of Mr. Han’s term of office, ending at the Company’s 2020 annual general meeting.

On February 13, 2020, Mr. Burdick tendered his resignation as a Class B director with effect as of February 18, 2020, and, pursuant to the Governance Agreement, SVP nominated Bouk van Geloven to fill the vacancy resulting from Mr. Burdick’s resignation. On February 18, 2020, the Board co-opted Mr. van Geloven to fill the vacancy on the Board resulting from Mr. Burdick’s resignation and to serve as a Class B director for the remainder of Mr. Burdick’s term of office, ending at the Company’s 2020 annual general meeting.

If the shareholders grant the discharge for the relevant period, shareholders will not be able to initiate a liability claim against such directors in connection with the performance of their mandates for such period. However, such discharge will be valid only if the Annual Accounts and the Consolidated Financial Statements contain no omission or false information concealing the true situation of the Company, and with regard to any acts carried out which fall outside the scope of the Articles, only if they have been specifically indicated in the convening notice for the Annual General Meeting. For the fiscal year ended December 31, 2019 through their respective resignation dates, the Company believes no such instances that would invalidate the discharge have occurred.

The Board recommends that the shareholders acknowledge the resignations of Messrs. Han and Burdick and grant them discharge of liability for the exercise of their mandates as directors of the Company through their respective resignation dates.

Vote Required

Approval of this proposal requires the affirmative vote of a majority of the votes cast on the proposal. For more information on the voting requirements, see “Questions and Answers about the Proxy Materials, Annual Meeting and Voting.”

Recommendation of the Board of Directors

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Proposal No. 6: Confirmation of the appointment of Mr. Bouk van Geloven as a Class B director, as previously co-opted by the Board by resolutions taken on February 18, 2020

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The Board resolved to co-opt as a Class B director Mr. Bouk van Geloven to fill the vacancy on the Board resulting from Mr. Burdick’s resignation by resolutions dated February 18, 2020. In accordance with article 441-2 of the Law, it falls under the competence of the shareholders to confirm the appointment of directors who have been temporarily co-opted. The Board recommends that the shareholders confirm the appointment of Mr. van Geloven as a Class B member of the Board.

Vote Required

Approval of this proposal requires the affirmative vote of a majority of the votes cast on the proposal. For more information on the voting requirements, see “Questions and Answers about the Proxy Materials, Annual Meeting and Voting.”

Recommendation of the Board of Directors

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Corporate Governance

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Board Corporate Governance Guidelines; Global Code of Conduct

We are committed to strong and effective governance practices that promote and protect the interests of our shareholders. The Corporate Governance Guidelines of our Board of Directors, along with the charters of the standing committees of our Board, provide the framework for the governance of the Company and reflect the Board’s commitment to monitor the effectiveness of policy and decision making at both the Board and management levels.

We have a Global Code of Conduct applicable to our employees, directors and officers, including our Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer and other senior financial officers, that meets the standards and definitions of the NYSE and SEC. Any changes to, or waivers from, the Global Code of Conduct will be made only by the Board, or a committee thereof, and appropriate disclosure will be made promptly on our website at www.pacificdrilling.com, in accordance with the rules of the SEC. Our Nominating and Corporate Governance Committee has adopted Corporate Governance Guidelines applicable to our directors.

We have posted a copy of each of our Global Code of Conduct and our Corporate Governance Guidelines on our website at www.pacificdrilling.com in the Investor Relations section and will provide a copy of either without charge upon request sent to pdcompliance@pacificdrilling.com.

Board Composition, Classification and Leadership Structure

Our Articles provide that all powers not expressly reserved to the shareholders by law or the Articles fall within the competence of the Board, which has full power to carry out and approve all acts and operations consistent with the Company’s corporate object as set forth in the Articles. The total number of directors constituting our Board is seven. The Board is currently divided into two classes, designated Class A (composed of four directors) and Class B (composed of three directors). Both Class A and B directors are elected to terms of one year in length, except that our Class B directors were appointed to serve an initial two-year term following November 19, 2018, the effective date of our Plan of Reorganization described below, and ending at the 2020 annual general meeting of the shareholders of the Company. Commencing with our 2020 annual general meeting, each of the Class A directors and Class B directors will be elected to serve one-year terms. Members of our Board are elected by a majority of the votes cast at any general meeting of shareholders and have one vote each at all meetings of the Board.

The Company has entered into a Governance Agreement with certain holders of its shares, defined therein as the Avenue Parties, the SVP Parties, and the Other Lenders. Pursuant to the Governance Agreement, until the Nomination Termination Time (as defined in the Governance Agreement), the Avenue Parties have the right to nominate one Class B director, the SVP Parties have the right to nominate one Class B director and the Other Lenders have the right to nominate one Class B director. Each of such parties also has the right to fill a vacancy with respect to its Class B Director nominee. As defined in the Governance Agreement, the “Nomination Termination Time” means the first such time that it becomes known to the Company that any of (i) the Avenue Parties (collectively and in the aggregate with each other), (ii) the SVP Parties (collectively and in the aggregate with each other) or (iii) the Other Lenders (collectively and in the aggregate with each other), hold, beneficially or of record, and have the power to vote or direct the voting of, 10% or less of the then issued and outstanding shares of the Company. For additional information regarding the Governance Agreement, see “Certain Transactions.”

As defined in the Governance Agreement, the Other Lenders are the Abrams Parties (certain holders related to Abrams Capital Management, L.P.), Fidelity Parties (certain holders related to FMR LLC), Highbridge Parties (certain parties related to Highbridge Capital Management, LLC) and Whitebox Parties (certain parties related to Whitebox Advisors LLC). The Class B director nominee of the Other Lenders is determined by the plurality of the voting power of the respective shares of the Company held, beneficially or of record, by the Other Lenders. As of April 3, 2020, based on information provided to the Company by each of such Other Lenders, the

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Abrams Parties held 7,414,537 shares, the Fidelity Parties held 5,420,912 shares, the Highbridge Parties held 3,125,587 shares and the Whitebox Parties held 4,311,334 shares.

From and after the Nomination Termination Time, the Board will cease to be classified and each director then in office previously designated as a Class A director or Class B director will remain in office as a director until his or her term expires or until his or her earlier death, resignation or removal by the shareholders. Any director may be removed with or without cause by a simple majority vote at any general meeting of shareholders. If the office of a director becomes vacant, our Articles provide that the other directors, acting by a simple majority, may fill the vacancy on a provisional basis until a new director is appointed at the next general meeting of shareholders.

The Board is authorized to delegate the day-to-day management, and the power to represent the Company in this respect, to one or more directors, officers, managers or other agents, whether shareholders or not, acting either individually or jointly, provided that, prior to the Nomination Termination Time any appointment, delegation or power-of-attorney granted in respect of any Acquisition Proposal Matters (as defined in our Articles), or any revocation of the foregoing, shall only be effective if a Class B Majority (as defined below) votes in favor of such appointment, delegation or power-of-attorney, or revocation of the foregoing, as the case may be.

Pursuant to our Articles and the Governance Agreement, prior to the Nomination Termination Time, any two Class B directors acting in their capacities as such (a “Class B Majority”) have broad authority to act on the Company’s behalf in connection with any Acquisition Proposal or Acquisition (as such terms are defined in the Articles), including but not limited to the authority to solicit prospective Acquisition Proposals, to retain, at the Company’s expense such consultants, legal counsel and other advisors as a Class B Majority may from time to time deem appropriate to assist the Class B directors in the performance of their duties with respect to Acquisition Proposals, and subject to specified conditions, to execute and deliver on behalf of the Company definitive documentation providing for the consummation of an Acquisition.

Under Article 450-8 of the Law, one or more shareholders together holding at least 10% of our subscribed capital may require that one or more items appropriate for consideration by our shareholders be put on the agenda of any general meeting of shareholders. Notice of such agenda item or items must be sent to our registered office by registered mail at least five days prior to the date of the meeting.

W. Matt Ralls serves as our chairman of the Board with responsibilities that include: (1) presiding at meetings of the Board and executive sessions of its independent directors; (2) serving as a liaison between the independent directors and senior management; (3) approving the agendas for Board meetings; and (4) calling meetings of the independent directors. The Board believes that the separation of the roles of chairman and chief executive officer, although not required by our Corporate Governance Guidelines, is the appropriate leadership structure for the Company at this time. The Board believes this structure provides an effective balance between strong company leadership and appropriate safeguards and oversight by independent directors.

Board and Committee Independence; Audit Committee Financial Expert

On the basis of information solicited from each director, and upon the advice and recommendation of the Nominating and Corporate Governance Committee, our Board annually determines the independence of each of our then-current directors in connection with the nomination process. Further, in connection with the appointment of any new director to the Board during the year, our Board makes the same determination. In making these determinations, our Board, with assistance from the Company’s legal counsel, evaluated responses to a questionnaire completed annually by each director regarding relationships and possible conflicts of interest between each director, the Company and management. In its review of director independence, our Board and legal counsel considered all commercial, industrial, banking, consulting, legal, accounting, charitable, and familial relationships any director may have with the Company or management.

Our Board has determined that all of our directors other than our Chief Executive Officer, Mr. Wolford Jr., are independent as defined under the standards of the NYSE, namely, Donald Platner, W. Matt Ralls, Kiran Ramineni, John V. Simon, David N. Weinstein and Bouk van Geloven. In addition, our Board determined that

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Daniel Han and Edward H. Burdick, who resigned from our Board in November 2019 and February 2020, respectively, were independent. Members of our Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee all meet the independence requirements of the NYSE. In addition, our Board has determined that Mr. Weinstein qualifies as an “audit committee financial expert,” as such term is defined by the rules of the SEC.

Board Diversity, Tenure and Refreshment

Certain Effects of our Recent Emergence from Bankruptcy

The Company emerged from Chapter 11 proceedings on November 19, 2018, pursuant to a plan of reorganization (the “Plan of Reorganization”) that provided for a completely new capital and governance structure for the Company. Pursuant to the Plan of Reorganization, the Company’s Articles were amended to, among other things, reflect the new capital structure and establish a classified board of four Class A directors and three Class B directors. All of the Company’s former directors prior to our emergence from bankruptcy resigned from our Board, and upon our emergence from bankruptcy we had an entirely new Board.

Our current Class A Board members, including our Chairman of the Board and our Chief Executive Officer, were selected by members of an ad hoc group of holders of our pre-petition indebtedness (the “Ad Hoc

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Group”). Prior to our emergence from bankruptcy, the Ad Hoc Group employed the services of Heidrick & Struggles, an executive search firm, to assist in the search for and recruitment of our Board and CEO. In the course of this search, the Ad Hoc Group placed a priority on creating a board that contained a diverse mix of experience and skills that would maximize the ability of the Company to succeed and thrive following its bankruptcy. The Ad Hoc Group also put a priority on gender and racial/ethnic diversity, and in the recruiting process, considered several diverse candidates, each of whom, for a variety of reasons, was either not available or interested in the opportunity. The Class A Board members ultimately appointed by the Ad Hoc Group have a strong mix of experience and skills, including CEO or other senior executive experience, offshore drilling or energy industry experience, capital markets and banking experience and other public company board experience, which, we believe, provides the Company the guidance and oversight it needs.

Pursuant to the terms of the Governance Agreement, each of the Avenue Parties, the SVP Parties, and the Other Lenders has the right to nominate one Class B director, and the right to fill a vacancy with respect to its Class B Director nominee.  Our current Class B directors were selected by these shareholders in accordance with the Governance Agreement.  For additional information regarding the Class B director nomination process and the Governance Agreement, see “-- Board Composition, Classification and Leadership Structure.”

Board Diversity

Although we do not have a formal diversity policy, we are committed to diversity, including gender and racial/ethnic diversity, as important factors in determining the composition of the Board. During the recruitment and evaluation of the suitability of potential director nominees, the Nominating and Corporate Governance Committee will consider the diversity of nominees as one consideration among many. To achieve diversity among directors, the Nominating and Corporate Governance Committee will consider a number of demographics, including, but not limited to, race, gender, ethnicity, culture, nationality and age to continue developing a Board that reflects diverse backgrounds, viewpoints, experience, skills and expertise.

Board Tenure and Refreshment

As described above, upon our emergence from bankruptcy, we had an entirely new Board. Pursuant to the Plan of Reorganization, as of November 19, 2018, W. Matt Ralls (Chairman), Bernie G. Wolford Jr. and David N. Weinstein joined our Board as Class A directors, and Daniel Han, Donald Platner, and Kiran Ramineni joined our Board as Class B directors. Pursuant to the Governance Agreement, Mr. Ramineni was nominated for election as a Class B director by the Avenue Parties, Mr. Han was nominated for election as a Class B director by the SVP Parties, and Mr. Platner was nominated for election as a Class B director by the Other Lenders. Messrs. Ralls, Ramineni, Han and Platner were elected as directors at an extraordinary general meeting of shareholders on November 19, 2018. Messrs. Wolford and Weinstein were co-opted by our Board as Class A directors on November 19, 2018 to fill vacancies. John V. Simon was co-opted by our Board as a Class A director on December 14, 2018 to fill the remaining vacancy on our Board. At our 2019 annual general meeting, our shareholders (i) confirmed the appointments of Messrs. Simon, Weinstein and Wolford to fill vacancies, and (ii) re-appointed Messrs. Ralls, Simon, Weinstein and Wolford to our Board for a term ending at the 2020 Annual General Meeting.

On November 21, 2019, Daniel Han tendered his resignation as a Class B director, and, pursuant to the Governance Agreement, the SVP Parties nominated Edward H. Burdick to fill the vacancy created by Mr. Han’s resignation. On November 21, 2019, the Board co-opted Mr. Burdick to fill the vacancy on the Board created by Mr. Han’s resignation and to serve as a Class B director for the remainder of Mr. Han’s term of office, ending at the Company’s 2020 annual general meeting. On February 13, 2020, Mr. Burdick tendered his resignation as a Class B director with effect as of February 18, 2020, and, pursuant to the Governance Agreement, the SVP Parties nominated Bouk van Geloven to fill the vacancy resulting from Mr. Burdick’s resignation. On February 18, 2020, the Board co-opted Mr. van Geloven to fill the vacancy on the Board resulting from Mr. Burdick’s resignation and to serve as a Class B director for the remainder of Mr. Burdick’s term of office, ending at the Company’s 2020 annual general meeting.

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As part of its Board recruitment and refreshment process, the Board will continue to seek to propose new directors who complement the diversity, skills and expertise of the Board. As mentioned above, gender and racial/ethnic diversity will remain important factors for the Board in its director recruitment and refreshment efforts.

Board and Committee Meeting Attendance

Our Board held a total of eight meetings during 2019. During 2019, each director participated in more than 75% of the total number of meetings of our board and meetings of each committee on which such director served.

Because we are a Luxembourg company, our annual general meetings have historically been held in Luxembourg and our directors have not historically attended these meetings. We invite our directors to attend the annual general meetings of our shareholders held in Luxembourg or, only in exceptional circumstances, outside of Luxembourg, and we encourage them to attend in person any annual general meetings held in the United States. We plan to schedule a regular meeting of the Board on the same day as future annual general meetings of shareholders so that directors can attend the annual general meeting without the Company incurring the extra travel and related expenses of a separate meeting.

Board Committees

Our Board has established an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee, which comply with applicable requirements of the SEC and NYSE, and may create such other committees as the Board determines from time to time. Each of the standing committees of our Board has the composition and responsibilities described below.

Each of the Audit, Compensation and Nominating and Corporate Governance Committees are composed entirely of independent directors. Each committee operates under a written charter adopted by our Board. All of the committee charters are available on our website at www.pacificdrilling.com under the Corporate Governance section of the Investors Relations page and are available in print upon request. The following table identifies the current committee members.

Audit Committee

The members of our Audit Committee are Messrs. Weinstein (as Chairman), Ralls and Simon. Our Board has determined that each of the members of our Audit Committee is “independent” under the standards of the NYSE and SEC rules. In addition, our Board has determined that Mr. Weinstein is an “audit committee financial expert,” as defined by the SEC.

The Audit Committee’s primary responsibilities are to assist the Board in its oversight of: our accounting practices; the integrity of our financial statements; our compliance with legal and regulatory requirements; the qualifications, selection, independence and performance of our independent auditor and the internal audit

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function. The Audit Committee has adopted a charter that is available on our website. The Audit Committee held seven meetings in 2019.

Compensation Committee

The members of our Compensation Committee are Messrs. Simon (as Chairman), Ralls and Weinstein. Our Board has determined that each of the members of our Compensation Committee is “independent” under the standards of the NYSE and SEC rules. The primary purpose of this committee is to oversee and make recommendations to our Board relating to, the compensation of our executive officers and directors. The Compensation Committee has adopted a charter that is available on our website.

No member of our Compensation Committee has been at any time an employee of ours. None of our executive officers serves on the board of directors or compensation committee of a company that has an executive officer that serves on our Board or Compensation Committee. No member of our Board is an executive officer of a company in which one of our executive officers serves as a member of the board of directors or compensation committee of that company. The Compensation Committee held four meetings in 2019.

Nominating and Corporate Governance Committee

Our Board has established a Nominating and Corporate Governance Committee, the members of which are Messrs. Ralls (as Chairman), Simon and Weinstein. Our Board has determined that each of the members of our Nominating and Corporate Governance Committee is “independent” under the standards of the NYSE.

The primary purpose of the Nominating and Corporate Governance Committee is to assist the Board of Directors in identifying individuals qualified to become members of the Board of Directors and to provide advice to the Board of Directors regarding its composition and committees. The Committee also reviews and recommends Corporate Governance Guidelines, and any amendments, to our Board of Directors. The Nominating and Corporate Governance Committee has adopted a charter that is available on our website. The Nominating/Governance Committee held one meeting in 2019.

Compensation Committee Procedures

The Compensation Committee has the authority to make recommendations to our Board as to annual compensation amounts and annual incentive plan criteria for our executive officers, the evaluation of the performance of our executive officers, and the amounts of awards to our executive officers under our incentive plans and programs. The Compensation Committee also reviews, and when appropriate, recommends to the Board any proposed plan or arrangement, including employment agreements, providing for incentive, severance, retirement, change-in-control or other compensation to our executive officers. The Compensation Committee also oversees our assessment of whether our compensation policies and practices are likely to expose the Company to material risks.

In exercising its authority and carrying out its responsibilities, the Compensation Committee meets to discuss the structure of executive compensation, proposed employment agreements, severance arrangements, salaries, cash and equity incentive awards, and the achievement and the setting of financial and individual performance goals on which executive incentive compensation is based, using information circulated in advance of the meeting by the chair of the Compensation Committee. The Compensation Committee may delegate any of its responsibilities to one or more members of the committee, except to the extent such delegation is prohibited by law, rules and regulations of the SEC or the listing standards of NYSE. When the Compensation Committee discusses an executive officer’s compensation, he or she is not permitted to be present.

The Compensation Committee engaged an independent executive compensation consultant to advise the Compensation Committee on matters related to executive compensation. Please refer to the section titled “Executive Officer Compensation—Compensation Discussion and Analysis” for more information related to the independent executive compensation consultant.

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Board Evaluation Process

The Nominating and Corporate Governance Committee is responsible for overseeing the annual performance evaluation of the Board. Annually, each director completes an evaluation of the full Board and each committee upon which the director serves. This board evaluation process is intended to provide each director with an opportunity to evaluate performance for the purpose of improving board and committee processes and effectiveness. The detailed questionnaire seeks quantitative ratings and subjective comments in key areas of board practices and asks each director to evaluate how well the Board or the committee, as applicable, operates and to make suggestions for improvements. Replies are anonymous and are collected and summarized by the chair of the Nominating and Corporate Governance Committee. The summary is then discussed by the independent directors in an executive session held for such purpose. In addition, the chair of the Nominating and Corporate Governance Committee conducts one-on-one interviews with each director to solicit additional feedback on the overall operation of the Board and its committees, as well as specific feedback on the effectiveness of individual directors. The Chairman of the Board, who is also currently the chair of the Nominating and Corporate Governance Committee, discusses the individual feedback with each Board member. Any areas of Board or committee performance that are identified as needing improvement or change are considered by the Nominating and Corporate Governance Committee, which then makes a recommendation to the Board on the matter.

Board’s Role in Oversight of Risk Management

Our Board as a whole is responsible for risk oversight, with reviews of certain areas being conducted by the relevant Board committees that report to the full Board. In its risk oversight role, our Board focuses on understanding the nature of our enterprise risks, including our operations and strategic direction, as well as the adequacy of our risk management process and overall risk management system. There are a number of ways our Board performs this function, including (i) receiving management updates on our business operations, financial results and strategy and discussing risks related to the business at each regular Board meeting, (ii) receiving reports on all significant committee activities at each regular Board meeting and (iii) evaluating the risks inherent in significant transactions as applicable.

Throughout the year, the Board receives briefings and assessments of the Company’s risks as they relate to:

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Our Board believes that full and open communication between executive management and our Board is essential to effective risk oversight. Our Chairman meets regularly with executive management to discuss a variety of matters including business strategies, opportunities, key challenges and risks facing the Company, as well as enterprise risk assessment and risk mitigation strategies. Executive management attends all regularly scheduled Board meetings where they make presentations to our Board on various strategic matters involving our operations and are available to address any questions or concerns raised by our Board on risk management or any other matters. Our Board oversees the strategic direction of the Company, and in doing so considers the potential rewards and risks of the Company’s business opportunities and challenges and monitors the development and management of risks that impact our strategic goals. The Board’s involvement in the strategic planning process is a critical part of the assessment of the risks that impact our strategic goals and the management of those risks as they develop.

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Each standing committee of the Board assists the Board in fulfilling its risk oversight responsibility. The chart below provides an overview of the allocation of risk oversight responsibilities among the Board committees.

The Audit Committee assists our Board in fulfilling its oversight responsibilities with respect to certain areas of risk. The Audit Committee is responsible for reviewing and discussing with management and our independent auditor any guidelines and policies relating to risk assessment and risk management, and the measures management has taken to monitor, control and minimize the Company’s major financial risk exposures. The Audit Committee also discusses with our independent auditor the results of their processes to assess risk in the context of its audit engagement. The Audit Committee also assists our Board in fulfilling its oversight responsibilities by monitoring the effectiveness of the Company’s internal control over financial reporting and legal and regulatory compliance. Our independent auditor meets regularly in executive session with the Audit Committee. The Audit Committee regularly reports on these matters to the full Board. Finally, in furtherance of its risk oversight responsibility, the Audit Committee provides for the confidential, anonymous submission by employees and others of concerns regarding questionable accounting, auditing and any other matters. These submissions are collected by an independent organization specializing in those services and are conveyed to the Chair of the Audit Committee, and our Chief Compliance Officer and General Counsel.

The Compensation Committee assists our Board in fulfilling its oversight responsibilities with respect to the Company’s assessment of whether its compensation policies and practices are likely to expose the Company to material risks, including the Company’s compensation of executives and incentive compensation awarded to officers. In addition, in consultation with management, the Compensation Committee is responsible for overseeing the Company’s compliance with regulations governing executive compensation. The Compensation Committee also oversees the management and development of the Company’s talent and the succession plan for key senior management positions, which we consider a critical asset of the Company. In addition, the Compensation Committee reviews and discusses with management and the Board the CEO succession plan.

The Nominating and Corporate Governance Committee assists our Board in fulfilling its oversight responsibilities with respect to the management of risks associated with our Board leadership structure, including committee appointments, size of Board and nomination of Board members, and corporate governance matters. The Nominating and Corporate Governance Committee addresses some of its risk oversight responsibilities by periodically reviewing of our Corporate Governance Guidelines and conducting annual Board self-evaluations and individual director evaluations.

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Consideration of Class A Director Nominees

As described elsewhere herein, pursuant to the Governance Agreement, each of the SVP Parties, Avenue Parties and Other Lenders have the sole authority to nominate one of the three Class B directors on our Board. In evaluating nominees for membership as Class A directors on our Board, the Nominating and Corporate Governance Committee has not specified any minimum qualifications for serving on the Board, but seeks to achieve a Board that is composed of individuals who have experience that is relevant to the needs of the Company, who have a high level of professional and personal integrity, who have the ability and willingness to work cooperatively with other members of our Board and with senior management, and who contribute to the diversity of the Board taking into account many factors, including business experience, professional training, geographical representation, race, gender and age, among other considerations. (See “Board Diversity, Tenure and Refreshment – Board Diversity” above.) Experience in the offshore drilling and energy industry and in one or more of finance and accounting, corporate governance, and executive management matters are considered particularly valuable. An independent director candidate is expected to be committed to enhancing shareholder value, and to have sufficient time to carry out the duties of a director, both on the full Board and on one or more of its standing committees. In selecting nominees, the Nominating and Corporate Governance Committee will seek to have a Board that represents a diverse range of perspectives and experience relevant to the Company. The Nominating and Corporate Governance Committee will also evaluate each individual in the context of our Board as a whole, with the objective of recommending nominees who can best perpetuate the success of the business, be an effective director in conjunction with the full Board and represent shareholder interests through the exercise of sound judgment using his or her diversity of experience in these various areas. In determining whether to recommend a director for re-election, the Nominating and Corporate Governance Committee will also consider the director’s age, tenure, past attendance at meetings and participation in, and contributions to, the activities of our Board.

The Nominating and Corporate Governance Committee will regularly assess whether the size of our Board is appropriate, and whether any vacancies on our Board are expected due to retirement or otherwise. In addition, the Nominating and Corporate Governance Committee periodically assesses the experience, qualifications, attributes and skills of the independent directors to determine if there are gaps that the Board should seek to fill. In the event that vacancies are anticipated, or otherwise arise, the Nominating and Corporate Governance Committee will consider various potential candidates, who may come to the Nominating and Corporate Governance Committee’s attention through professional search firms, shareholders or other persons. Alternatively, the Nominating and Corporate Governance Committee may recommend a reduction in the size of the Board. Each candidate brought to the attention of the Nominating and Corporate Governance Committee, regardless of who recommended such candidate, will be considered on the basis of the criteria set forth above.

Communications with the Board

Shareholders or other interested parties may communicate directly with one or more members of our Board, or the non-employee directors as a group, by writing to the director or directors at the following address: ^c⁄_o Corporate Secretary, Pacific Drilling S.A., 8-10 Avenue de la Gare, L-1610 Luxembourg; or by e-mail to the corporate secretary at: corporatesecretary@pacificdrilling.com. Each communication should specify the addressee as well as the general topic of the communication. The communication will be forwarded to the appropriate director or directors, unless it is frivolous. If the communication is voluminous, the corporate secretary will summarize it and furnish a summary to the appropriate director or directors.

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substantial drop in our stock price and to prevent excessive dilution, the Compensation Committee approved the following changes to our non-employee Class A director (other than the Chairman) compensation program:

Additionally, in April 2020, the Board approved the award to Mr. Ralls of a time-based cash award of $100,000, which will vest and pay out on December 12, 2020, provided he remains a member of the Board on that date.

Stock Ownership Guidelines

In May 2019, the Board adopted stock ownership guidelines requiring our non-employee Class A directors to accumulate our common shares worth five times the annual cash retainer paid to the non-employee Class A directors within a five-year period. Vested and unvested time-based RSUs issued to the directors are counted toward these stock ownership guidelines; however, unearned performance-based RSUs are not counted toward the guidelines. Each of our non-employee Class A directors has until May 20, 2024 to reach his target ownership level. Until the ownership levels are met, our non-employee Class A directors are expected to retain 50% of the shares issued upon the vesting of equity awards granted by the Company. As of December 31, 2019, and based on the average closing price of our common shares for the year ended December 31, 2019 of $4.08, Mr. Ralls has met the stock ownership guidelines applicable to him.

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Proposal No. 7: Approval of Compensation of the Class A members of the Board for 2020

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The compensation of the Company’s non-employee Class A directors is approved annually at the Annual General Meeting. Our Chief Executive Officer, Bernie G. Wolford Jr., is our only Class A director who is an employee, and he receives no additional compensation for his service on our Board. The Class B directors receive no compensation for their service on our Board.

It is proposed that the compensation described elsewhere in this Proxy Statement under the heading “Director Compensation” be approved by the shareholders to be paid to the non-employee Class A members of the Board for their service in 2020.

Vote Required

Approval of this proposal requires the affirmative vote of a majority of the votes cast on the proposal. For more information on the voting requirements, see “Questions and Answers about the Proxy Materials, Annual Meeting and Voting.”

Recommendation of the Board of Directors

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Proposal No. 8: Re-appointment of the following members of the Board for a term ending at the annual general meeting of the Company to be held in 2021: W. Matt Ralls, Bouk van Geloven, Donald Platner, Kiran Ramineni, John V. Simon, David N. Weinstein, and Bernie G. Wolford Jr.

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The mandates of the Class A and Class B directors end at the 2020 Annual General Meeting in accordance with the terms of their election, and the directors stand for re-appointment to the Board, each for a term ending at the annual general meeting to be held in 2021. As a result of the above, subject to the approval of the shareholders, the Board will be composed of Messrs. W. Matt Ralls, Bernie G. Wolford Jr., John V. Simon and David N. Weinstein, as Class A directors, and Messrs. Bouk van Geloven, Donald Platner and Kiran Ramineni, as Class B directors.

Vote Required

Approval of this proposal requires the affirmative vote of a majority of the votes cast on the proposal. For more information on the voting requirements, see “Questions and Answers about the Proxy Materials, Annual Meeting and Voting.”

Recommendation of the Board of Directors

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Information about Director Nominees

The table below provides certain information as of April 3, 2020, with respect to the director nominees. The biography of each of the director nominees contains information regarding the person’s business experience, director positions with other public companies held currently or at any time during the last five years, and the experiences, qualifications, attributes and skills that caused our Board to determine that the person should be nominated to serve as a director of the Company. Unless otherwise indicated, each person has been engaged in the principal occupation shown for the past five years. There are no family relationships between any director or executive officer, and other than pursuant to the Governance Agreement, there are no arrangements or understandings between any of the directors and any other person pursuant to which he was or is to be selected as a director.

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Bernie G. Wolford Jr. Biographical information about Mr. Wolford appears above under the heading “Information about Director Nominees.”

Michael D. Acuff.  Mr. Acuff joined Pacific Drilling in June 2014 as our Senior Vice President of Sales and Business Development and was appointed Senior Vice President, Commercial in November 2016. Mr. Acuff is responsible for management and administration of our sales and contract acquisition, strategic planning activities and procurement and supply chain. Mr. Acuff has more than 20 years of industry experience, and prior to joining Pacific Drilling, was Senior Vice President of Contracts and Marketing at Diamond Offshore Drilling, Inc., where he worked from 2010 to 2013. From 1999 to 2010 Mr. Acuff held various management positions of increasing responsibility in Marketing, Corporate Planning, Operations and Human Resources with Transocean Ltd. Prior to joining Transocean Ltd., Mr. Acuff served in the U.S. Army from 1993 to 1997 as Battery Executive Officer, Battalion Personnel Officer and Platoon Leader. Mr. Acuff holds a Bachelor of Science in Civil Engineering from the University of Tennessee and an MBA in Finance from Rice University.

Lisa Manget Buchanan.  Ms. Buchanan joined Pacific Drilling in August 2015 as our Senior Vice President, General Counsel and Secretary. Ms. Buchanan has over 30 years of legal experience, most recently serving as Executive Vice President, General Counsel and Secretary and Chief Administrative Officer at Cal Dive International, Inc. from June 2006 to July 2015. On March 3, 2015, Cal Dive and certain of its subsidiaries filed voluntary petitions for relief under the provisions of Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. Prior to Cal Dive, Ms. Buchanan was a partner at the law firm of Jones Walker LLP, which she joined as an associate in 1987 and became a partner in January 1994. Ms. Buchanan holds a Bachelor of Science degree in commerce from the McIntire School of Commerce, University of Virginia and a Juris Doctorate from the Louisiana State University Law Center.

James W. Harris. Mr. Harris joined Pacific Drilling in July 2019 as our Senior Vice President and Chief Financial Officer, responsible for the Company’s global accounting, treasury, financing, audit, tax, corporate planning and investor relations activities.   Mr. Harris has over 30 years of experience in the energy industry, in a variety of financial leadership, strategic and business planning roles.  Before joining Pacific Drilling, Mr. Harris served as Executive Vice President and Chief Financial Officer of Forum Energy Technologies, Inc. from December 2005 to March 2018.   He also served Forum as Executive Vice President, Drilling & Subsea from September 2017 until July 2018, following which he continued to serve Forum as an advisor until April 2019.  Prior to that, Mr. Harris served VeriCenter, Inc. as Vice President and Controller and General Manager of the company’s AppSite Hosting business unit from January 2004 to November 2005.  He served in various roles, including as Vice President - Tax, Vice President - Finance and Contractor, for Enron Energy Services and Enron Corp. from August 1999 to December 2003.  From February 1994 to May 1999, Mr. Harris served in various

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roles of increasing responsibility for Baker Hughes Incorporated, serving as Vice President, Tax and Controller from 1998.  From 1990 to 1994, Mr. Harris served as Senior Tax Manager for PricewaterhouseCoopers LLP, having joined the firm in 1985.  Mr. Harris holds a Bachelor of Science in Accounting and a Masters in Accounting from Brigham Young University and an MBA from Rice University.

Amy L. Roddy. Ms. Roddy joined Pacific Drilling in 2011 as our Director of Investor Relations. She subsequently served in management positions in corporate communications and human resources before being appointed Senior Vice President, Corporate Services in May 2016. Ms. Roddy has more than 15 years of oil and gas industry experience, including time at Transocean, where she held management positions in investor relations and corporate planning. Prior to joining Transocean, Ms. Roddy worked as a process engineer for Fluor Corp. Ms. Roddy holds a Bachelor of Science degree in chemical engineering from Texas A&M University and a Master of Engineering Management and an MBA from Northwestern University.

Anthony C. Seeliger. Mr. Seeliger joined Pacific Drilling in 2012 and was named Senior Vice President of Operations in 2015. He was most recently Vice President of the Americas since July 2012. Mr. Seeliger provides overall direction and guidance to the Company’s operational, operations excellence and technical support and Quality-Health-Safety-Environment functions with the objective of maximizing health, safety, environmental and operational performance, growth and profitability, as well as day-to-day leadership and management of the global operations activities. Mr. Seeliger brings over 25 years of industry experience, including an extensive background in operations management. Prior to joining Pacific Drilling, he spent nine years with Pride International, Inc., acquired by Ensco plc in 2011, most recently as vice president of Middle East and Africa operations based in Dubai, United Arab Emirates, and previously in similar management positions based in Europe, Brazil and the Gulf of Mexico. Prior to Ensco/Pride, Mr. Seeliger held positions of increasing responsibility at industry-related companies including Santa Fe International, Hess Corporation, Gulf Publishing and IBM Global Services. Mr. Seeliger holds a Bachelor of Science degree in business administration from the University of Southern California and an MBA from Southern Methodist University.

Richard E. Tatum.  Mr. Tatum joined Pacific Drilling in October 2010 as our Director of Financial Reporting and was appointed Senior Vice President and Chief Accounting Officer in August 2017. Prior to that, Mr. Tatum served as our Vice President Controller from March 2014 until August 2017. Mr. Tatum has over 15 years of experience in offshore drilling and public accounting. Prior to joining Pacific Drilling in October 2010, Mr. Tatum served at Frontier Drilling from 2009 until its merger with Noble Corp. in 2010. Mr. Tatum began his career as an auditor with Grant Thornton LLP where he held a variety of roles with increasing responsibilities, his most recent position being a Manager in Grant Thornton’s National Professional Standards Group. Mr. Tatum received a Bachelor of Science degree in business administration and a Master of professional accounting degree from the University of Texas at Austin and is a CPA.

Executive Officers - Pacific Drilling Bankruptcy Proceedings. On November 12, 2017, Pacific Drilling and certain of its subsidiaries filed voluntary petitions for relief under the provisions of Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York. On November 19, 2018, the Debtors emerged from bankruptcy after successfully completing their reorganization pursuant to the Plan of Reorganization. Messrs. Acuff and Tatum and Ms. Buchanan were executive officers of Pacific Drilling at the time the petitions were filed. Ms. Roddy and Mr. Seeliger were not named as executive officers of Pacific Drilling until February 2019, Mr. Wolford joined Pacific Drilling on November 19, 2018 and Mr. Harris joined Pacific Drilling on July 22, 2019.

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Stock Ownership of Directors, Director Nominees and Executive Officers

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We believe that it is important for our directors and executive officers to align their interests with the long-term interests of our shareholders. We encourage stock accumulation through the grant of equity incentives to our directors and executive officers and through our stock ownership guidelines applicable to our directors and executive officers.

The table below shows the number and percentage of our outstanding common shares beneficially owned as of the record date, April 3, 2020, by each of our current director, our named executive officers and all of our current directors and executive officers as a group. Unless otherwise indicated, all shares shown are held with sole voting and investment power. Common shares do not differ in voting rights.

*Less than 1%.

(a)Based on issued and outstanding shares of 75,198,547 as of April 3, 2020.

(b)Information for Mr. Wolford appears above under “Directors.”

(c)Mr. Boots resigned from the Company effective June 30, 2019.

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(2)(a)Based on a Schedule 13G/A Report dated February 13, 2020 that this investor filed with the SEC and information provided to the Company by this investor. This investor indicated that it shares voting and dispositive power with respect to all of the above-listed shares. In addition, in this report, the investor indicated that the above-listed shares consist of: (i) 2,651,578 shares directly held by Kings Forest S.à r.l., (ii) 5,488,433 shares directly held by Queens Gate S.à r.l., (iii) 6,204,597 shares directly held by Rathgar S.à r.l., (iv) 5,641,911 shares directly held by Yellow Sapphire S.à r.l. (each an “SVP Fund” and collectively, the “SVP Funds”).

(b)In addition, the report indicates: (i) Strategic Value Partners, LLC is the investment manager of, and exercises investment discretion over Strategic Value Master Fund, Ltd., a Cayman Islands exempted company, which has an ownership interest in Field Point (Europe) II, LLC, a Delaware limited liability company, which has an ownership interest in Field Point IV, S.à r.l., a Luxembourg limited liability company, which has an ownership interest in Queens Gate, S.à r.l., a Luxembourg limited liability company, and Strategic Value Partners, LLC is indirectly majority owned and controlled by Mr. Khosla; (ii) SVP Special Situations III LLC (“Special Situations III”) is the investment manager of, and exercises investment discretion over Strategic Value Special Situations Master Fund III, L.P., a Cayman Islands exempted limited partnership, which has an ownership interest in Blue Sapphire, S.à r.l., a Luxembourg limited liability company, which has an ownership interest in Yellow Sapphire, S.à r.l., a Luxembourg limited liability company, and Strategic Value Partners, LLC is the managing member of Special Situations III, and Strategic Value Partners, LLC and Special Situations III are both indirectly majority owned and controlled by Mr. Khosla; (iii) SVP Special Situations IV LLC (“Special Situations IV”) is the investment manager of, and exercises investment discretion over Strategic Value Special Situation Master Fund IV, L.P., a Cayman Islands exempted limited partnership, which has an ownership interest in Ranelagh, S.à r.l., a Luxembourg limited liability company, which has an ownership interest in Rathgar, S.à.r.l., a Luxembourg limited liability company, and Strategic Value Partners, LLC is the managing member of Special Situations IV, and Strategic Value Partners, LLC and Special Situations IV are both indirectly majority owned and controlled by Mr. Khosla; and (iv) SVP Special Situations III-A LLC (“Special Situations III-A”) is the investment manager of, and exercises investment discretion over Strategic Value Opportunities Fund, L.P., a Cayman Islands exempted limited partnership, which has an ownership interest in Kings Valley, S.à r.l., a Luxembourg limited liability company, which has an ownership interest in Kings Forest, S.à r.l., a Luxembourg limited liability company, and Strategic Value Partners, LLC is the managing member of Special Situations III-A, and Strategic Value Partners, LLC and Special Situations III-A are both indirectly majority owned and controlled by Mr. Khosla.

(c)Except for Mr. Khosla, each “Reporting Person” listed in the report disclaimed beneficial ownership of all common shares owned directly by the SVP Funds. Mr. Khosla is the sole member of Midwood Holdings, LLC,

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which is the managing member of Strategic Value Partners, LLC and is also the indirect majority owner and control person of Strategic Value Partners, LLC, Special Situations III and Special Situations III-A. Mr. Khosla is also the Chief Investment Officer of Strategic Value Partners, LLC. As such, he may be deemed to control the voting and dispositive decisions with respect to the above-listed common shares made by Strategic Value Partners, LLC, Special Situations III, Special Situations IV and Special Situations III-A and may therefore be deemed to be the beneficial owner of the common shares reported above.

(d)Pursuant to the Governance Agreement, the SVP Funds and certain funds affiliated with Avenue Capital Group, LLC (the “Avenue Holders”) have agreed with one another to vote their common shares to elect members of the Pacific Drilling Board of Directors as set forth therein. Because of the relationship between the SVP Funds and the Avenue Holders as a result of the Governance Agreement, Strategic Value Partners, LLC, Special Situations III, Special Situations IV, Special Situations III-A and Mr. Khosla may be deemed pursuant to Rule 13d-3 under the Exchange Act to beneficially own 39,246,093 Pacific Drilling common shares (inclusive of the above-reported shares for Strategic Value Partners, LLC), which represents 52.2% of the total number of outstanding common shares of Pacific Drilling as of March 6, 2020. The address for each of the foregoing entities is c/o Strategic Value Partners, LLC, 100 West Putnam Avenue, Greenwich, CT 06830.

(3)(a)Based on a Schedule 13G/A Report dated February 12, 2020 that this investor filed with the SEC. In this report, this investor indicated that it shared voting and dispositive power with respect to all of the above-listed shares. In addition, in this report, this investor indicated that the above-listed shares are held directly by: (i) Avenue Energy Opportunities Fund, L.P., Avenue Energy Opportunities Fund II, L.P., Avenue PPF Opportunities Fund, L.P., Avenue Special Opportunities Fund II, L.P. and Avenue Strategic Opportunities Fund, L.P. (the “U.S. Funds”) and (ii) Avenue ASRS Europe Opportunities Fund, L.P., Avenue Europe Opportunities Master Fund, L.P., Avenue Europe Special Situations Fund III (Euro), L.P. and Avenue Europe Special Situations Fund III (U.S.), L.P. (the “Europe Funds” and together with the U.S. Funds, the “Avenue Funds”).

(b)Avenue Capital Management II, L.P. is the investment manager of the U.S. Funds and may be deemed to have voting and dispositive power over the 13,973,624 common shares owned by such entities. Avenue Europe International Management, L.P. is the investment manager of the Europe Funds and may be deemed to have voting and dispositive power over the 5,285,950 common shares owned by such entities. Avenue Capital Management II GenPar, LLC is the general partner of Avenue Capital Management II, L.P., and Avenue Europe International Management GenPar, LLC is the general partner of Avenue Europe International Management, L.P. Mr. Marc Lasry is the managing member of Avenue Capital Management II GenPar, LLC and Avenue Europe International Management GenPar, LLC. In this report, except for Mr. Lasry, each “Reporting Person” disclaimed beneficial ownership of all common shares owned directly by the Avenue Funds. Mr. Lasry is deemed to be the indirect beneficial owner of the shares reported by the Avenue Funds by reason of his ability to direct the vote and/or disposition of such securities, and his pecuniary interest in such shares (within the meaning of Rule 16a-1(a)(2) under the Exchange Act) is a fractional interest in such amount.

(c)Pursuant to the Governance Agreement, the Avenue Funds and certain funds affiliated with Strategic Value Partners, LLC (the “SVP Funds”) have agreed with one another to vote their common shares to elect members of the Pacific Drilling Board of Directors as set forth therein. Because of the relationship between the Avenue Funds and the SVP Funds as a result of the Governance Agreement, Avenue Capital Management II, L.P., Avenue Capital Management II GenPar, LLC, Avenue Europe International Management, L.P., Avenue Europe International Management GenPar, LLC and Marc Lasry may be deemed, pursuant to Rule 13d-3 under the Exchange Act to beneficially own 39,246,093 Pacific Drilling common shares (inclusive of the above-reported shares for Avenue Capital Management II, L.P.), which represents 52.2% of the total number of outstanding common shares of Pacific Drilling as of March 6, 2020. The address of each of the foregoing entities is c/o Avenue Capital Management II, L.P., 11 West 42nd Street, 9th Floor, New York, NY 10036.

(4)(a)Based on a Schedule 13G/A Report dated February 13, 2020 that Abrams Capital Management, L.P. (“Abrams CM LP”) filed with the SEC. In this report, Abrams CM LP indicated that it: (i) shared voting and dispositive power with respect to all of the above-listed shares with each of Mr. David Abrams and Abrams Capital Management, LLC (“Abrams CM LLC”), (ii) shared voting and dispositive power with respect to 5,974,140 shares with Abrams Capital Partners II, L.P. (“ACP II”), and (iii) shared voting and dispositive power with respect to 7,019,436 shares with Abrams Capital, LLC (“Abrams Capital”).

(b)Shares reported herein for Abrams Capital represent shares beneficially owned by ACP II and other private investment funds for which Abrams Capital serves as general partner. Shares reported herein for Abrams CM LP and Abrams CM LLC represent the above-referenced shares beneficially owned by ACP II and shares beneficially

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owned by other private investment funds, for which Abrams CM LP serves as investment manager. Abrams CM LLC is the general partner of Abrams CM LP. Shares reported herein for Mr. Abrams represent the above referenced shares reported for Abrams Capital and Abrams CM LLC. Mr. Abrams is the managing member of Abrams Capital and Abrams CM, LLC. In this report, each “Reporting Person” disclaimed beneficial ownership of the common shares reported, except to the extent of its or his pecuniary interest therein. The address for each of the foregoing entities is c/o Abrams Capital Management, L.P., 222 Berkeley Street, 21st Floor, Boston, MA 02116.

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Executive Officer Compensation

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2020 Compensation Decisions

The following Compensation Discussion and Analysis describes our executive compensation program for 2019, and thus does not address the impact of the COVID-19 global pandemic on the economy, our business and financial results, or our executive compensation for 2020. Effective April 1, 2020, in light of the current business environment as impacted by COVID-19, we implemented a Company-wide salary reduction initiative, which reduced the base salaries of all of our executive officers by 10%. The Board and the Compensation Committee will continue to consider the evolving impacts of this global health crisis when reviewing our 2020 executive compensation program and may take further steps they deem appropriate in response to the economic environment. Those 2020 executive compensation program decisions will be described in our proxy statement for next year’s Annual General Meeting.

Compensation Discussion and Analysis

This Compensation Discussion and Analysis, or CD&A, describes and analyzes our executive compensation philosophy and program in the context of the compensation paid during the last fiscal year to our chief executive officer, each of our current and former chief financial officer and our next three most highly-compensated executive officers during 2019 (collectively referred to as our “named executive officers” or “NEOs”). Our named executive officers for 2019 are:

Executive Summary

We are an international offshore drilling contractor committed to exceeding client expectations by delivering the safest, most efficient and reliable deepwater drilling services in the industry. Our primary business is to contract our high-specification drillship fleet to drill wells for our clients.

Impact of Emergence from Bankruptcy on Executive Compensation Programs

On November 12, 2017, Pacific Drilling and certain of its subsidiaries filed voluntary petitions for relief under the provisions of Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York. On November 19, 2018, the Company and certain of its subsidiaries emerged from bankruptcy after successfully completing their reorganization pursuant to the Plan of Reorganization. In connection with (or shortly following) its emergence from bankruptcy, the Company:

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2019 Business Highlights

Following our emergence from bankruptcy in November 2018, our management team focused on cost control and process optimization while delivering safe, efficient and reliable services to our clients. At the beginning of 2019, we had three rigs working, and four rigs smart-stacked. Although market conditions continued to be challenging at the start of 2019, through the year we saw a steady improvement in market conditions demonstrated by stable oil prices and a stronger demand for deepwater rigs. This resulted in a tightening of the deepwater drillship supply in many regions, leading to higher utilization and day rates, an increase in the pace of contracting activity and longer contract durations. During 2019, despite our recent emergence from bankruptcy, we successfully reactivated one of our smart-stacked rigs, won work from a new client and entered into a commitment letter for a new $50 million Revolving Credit Facility that we closed in early 2020. Specifically, we accomplished the following:

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Compensation Governance and Best Practices

Our executive compensation program is designed and managed by the independent Compensation Committee of our Board, referred to in this CD&A as the “Committee.” The Committee annually reviews the components and structure of our compensation program to ensure that the program supports our business objectives and is aligned with the interests of our shareholders and makes recommendations to the full board regarding all compensation decisions. As part of this review, the Committee seeks input from its independent compensation consultant to provide an outside perspective and evaluation of our program. The Committee and our Board also value our shareholders’ views on our program. Notably, as a result of the Governance Agreement, holders of approximately 79% of our common shares currently have direct input into our executive compensation program through their director nominees on our Board. See “Certain Transactions.”

We believe the following compensation governance practices and policies promote the accountability of our executives and strengthen the alignment of our executive and shareholder interests:

How We Determine and Assess Executive Compensation

Role of Independent Compensation Consultant

To assist in evaluating our compensation practices and the level of compensation provided to our executives, the Committee has retained an independent compensation consultant to provide advice and ongoing recommendations on these matters consistent with our business goals and pay philosophy. We believe that this input and advice produces more informed decision-making and assures that an objective perspective is considered in this important governance process. The Committee has retained Frederic W. Cook & Co., Inc. (“FW Cook”) as its executive compensation consultant. The Committee assessed FW Cook’s independence and concluded that FW Cook’s work does not raise any conflicts of interest.

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Market Data and Peer Group

In 2019, FW Cook was asked to benchmark the compensation of our executive officers as a reference for our Committee in structuring our executive compensation program following our emergence from bankruptcy. In screening for potential peers, the Committee and FW Cook used a number of factors, including industry classification, size, and labor market for executive talent. We used assets as the primary measure of size to reflect the asset intensive nature of the offshore drilling industry and used revenue and market capitalization as secondary measures. Following this analysis, the Committee selected the following peer group (the “peer group”), which the Committee referred to in order to evaluate our compensation programs following our emergence from bankruptcy and set 2019 compensation:

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