United states securities and exchange commission

Committees of the Board of Directors

Our Board of Directors has established an Audit Committee, a Compensation Committee and a Nominating Committee, and may create such other committees as the Board of Directors shall determine from time to time. Each of the standing committees of our Board of Directors has the composition and responsibilities described below.

Audit Committee

The members of our Audit Committee are Messrs. Charney (as Chairman), Asher and Schwed, each of whom our Board of Directors has determined is financially literate. Our Board of Directors 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 of Directors has determined that Mr. Charney is an Audit Committee financial expert.

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The Audit Committee’s primary responsibilities are to assist the Board of Directors’ 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 registered public accounting firm; and the internal audit function. The Audit Committee has adopted a charter defining the committee’s primary duties in a manner consistent with the rules of the SEC and the NYSE.

Compensation Committee

The members of our Compensation Committee are Messrs. Asher (as Chairman), Charney, Schwed and Samuels. The purpose of this committee is to oversee the discharge of the responsibilities of our Board of Directors relating to compensation of our executive officers. Our Compensation Committee also administers our incentive compensation and benefit plans. The Compensation Committee has adopted a charter defining the committee’s primary duties in a manner consistent with the rules of the SEC and the NYSE.

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 of Directors or Compensation Committee. No member of our Board of Directors 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.

Nominating Committee

Our Board of Directors has established a Nominating Committee, members of which are Messrs. Ducau (as Chairman), Asher and Iskander.

The purpose of the Nominating 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 has adopted a charter defining the committee’s primary duties in a manner consistent with the rules of the SEC and the NYSE.

Corporate Governance

Our Board of Directors is empowered to take any action necessary or desirable in view of carrying out our corporate objective, except for the powers specifically allocated to the shareholders by law or by our Articles.

Our Articles provide that the day-to-day management of our Company and the power to represent us in such matters may be delegated to one or more directors, officers or other agents. The day-to-day management has been delegated to Paul T. Reese, Chief Executive Officer, Johannes P. Boots, Chief Financial Officer, and Cees van Diemen, Chief Operating Officer, each of whom is authorized to represent us individually in this regard. However, certain matters may not be delegated by our Board of Directors, including approval of our accounts, approval of our annual budget, approval of our policies and approval of recommendations made by any committee of our Board of Directors.

Our Articles further provide that we are bound towards third parties in all matters by the joint signature of a majority of our Board of Directors. In addition, we are also bound towards third parties by the joint or single signature of any person to whom special signatory powers have been delegated pursuant to our Articles.

All decisions to be taken by our Board of Directors are subject to a quorum and vote of a majority of the directors. A Chairman of the Board is elected from the members of the Board. The Chairman has a casting vote in the event of a tie vote. Our Chairman of the Board is Cyril Ducau, who was re-elected at our 2017 AGM for a one-year term expiring at the 2018 AGM.

The Board must make all decisions in our best interests and each director must notify the Board of any possible conflicts between his/her personal interests and ours. A director must refrain from participating in any deliberation or decision involving such a conflict. A special report on any conflict of interest transaction must be submitted to the shareholders at the next general meeting before any shareholder vote on the matter.

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D. EMPLOYEES

Employees

As of December 31, 2017, we and our subsidiaries had a total of 768 employees and 5 subcontractors. These employees consisted of:

	·		631 employees and subcontractors in engineering and operations; and
	·		142 employees and subcontractors in finance, strategy and business development, sales and marketing and other administrative functions.

As of December 31, 2017, approximately 321 of our employees and our subcontractors were located in the United States and 181 were located in Nigeria. The remainder of our employees were in various other locations around the world.

As of December 31, 2016, we and our subsidiaries had a total of 843 employees and 5 subcontractors. These employees consisted of:

	·		705 employees and subcontractors in engineering and operations; and
	·		143 employees and subcontractors in finance, strategy and business development, sales and marketing and other administrative functions.

As of December 31, 2016, approximately 553 of our employees and our subcontractors were located in the United States and 207 were located in Nigeria. The remainder of our employees were in various other locations around the world.

As of December 31, 2015, we and our subsidiaries had a total of 947 employees and 241 subcontractors. These employees consisted of:

	·		972 employees and subcontractors in engineering and operations; and
	·		216 employees and subcontractors in finance, strategy and business development, sales and marketing and other administrative functions.

As of December 31, 2015, approximately 549 of our employees and our subcontractors were located in the United States and 512 were located in Nigeria. The remainder of our employees were in various other locations around the world.

We believe that our relations with employees and their labor unions are good. Some of our employees in Nigeria are currently represented by unions and covered by collective bargaining agreements.

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E. SHARE OWNERSHIP

The table below shows the number and percentage of our outstanding common shares beneficially owned by each of our directors and members of senior management and all of our directors and officers as a group as of March 23, 2018, including stock options and restricted share units awarded to them under the 2011 Stock Plan that are exercisable or vest within 60 days. See Item 6, “Compensation—Equity Compensation Plans” for a description of the 2011 Stock Plan.

		Shares'>Beneficial Interest in
		Common Shares
		Number of
		shares
Officer or Director		(in thousands)		Percentage (a)
Paul T. Reese		*		*	%
Cees van Diemen		*		*
Johannes P. Boots		*		*
Michael D. Acuff		*		*
Lisa Manget Buchanan		*		*
Richard E. Tatum		*		*
Cyril Ducau		—		—
N. Scott Fine		—		—
Laurence N. Charney		*		*
Jeremy Asher		*		*
Sami Iskander		*		*
Robert Schwed		*		*
Antoine Bonnier		—		—
Matthew Samuels		—		—
All officers and directors as a group (b)		272		1.3	%

*     Less than 1%.

(a)   Based on issued and outstanding shares of 21,338,602 as of March 23, 2018.

(b)   Includes an aggregate 0.1 million of common shares issuable upon exercise of options that are exercisable within 60 days and restricted share units that vest within 60 days held by our senior management and directors as of March 23, 2018. The exercise prices of the stock options range from $21.70 to $108.80 per share.

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ITEM 7.    MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

A. MAJOR SHAREHOLDERS

The following table sets forth information as of March 23, 2018 for each shareholder whom we know to beneficially own more than five percent of our outstanding common shares:

		Common Shares Held
		Number of
		Shares
Identity of Person or Group		(in thousands)		Percentage
Quantum Pacific (Gibraltar) Limited (1)		15,000		70.3	% (2)

	(1)		Quantum Pacific (Gibraltar) Limited is a Gibraltar company and wholly-owned subsidiary of Quantum Pacific International Limited, the indirect ultimate owner of which is a discretionary trust in which Mr. Idan Ofer is the primary beneficiary. The address of Quantum Pacific (Gibraltar) Limited is 57/63 Line Wall Road, Gibraltar.
	(2)		Based on issued and outstanding shares of 21,338,602 as of March 23, 2018.

As of March 23, 2018, we had only one shareholder of record in the United States, Cede & Co. (nominee of The Depository Trust Company), in whose name all shareholdings in the United States are recorded. This single shareholder of record in the United States represented approximately 29.7% of the total outstanding common shares. The number of beneficial owners of our common shares in the United States is significantly larger than the number of record holders of our common shares in the United States.

Our major shareholder has no different voting rights from those of the rest of our shareholders.

There are no arrangements, known to the Company, the operation of which may at a subsequent date result in a change in control of the Company, except as may result in connection with our emergence from our Chapter 11 proceedings.

B. RELATED PARTY TRANSACTIONS

See Note 20 to our consolidated financial statements.

C. INTERESTS OF EXPERTS AND COUNSEL

Not applicable.

ITEM 8.    FINANCIAL INFORMATION

A. CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION

See Item 18, “Financial Statements” within this annual report.

Legal Proceedings

See Note 14 to our consolidated financial statements.

Distribution Policy

We will not be permitted to pay dividends or make distributions with respect to our common shares during our Chapter 11 proceedings, and after emerging from the proceedings, our ability to do so may be limited by the plan of reorganization and terms of our equity or debt financing.

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B. SIGNIFICANT CHANGES

Not applicable.

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ITEM 9.    THE OFFER AND LISTING

A. OFFER AND LISTING DETAILS

Our common shares commenced trading on the NYSE on November 11, 2011 under the symbol “PACD.” As of September 13, 2017, our common shares have been delisted from the NYSE and have commenced trading in the “Pink Sheets” of OTC Pink, currently under the ticker symbol “PACDQ.” On March 23, 2018, the closing price of our common shares on the OTC Pink was $0.65 per share.

The following table sets forth, for each full financial year, high and low intraday sale prices of our common shares after adjusting all periods for the 1-for-10 reverse stock split in May 2016:

		Price Per Common Share
		OTC Pink				NYSE
		High		Low		High		Low
		(US$)		(US$)		(US$)		(US$)
Fiscal Year Ended December 31,
2017		0.94		0.15		4.88		0.38
2016		n/a		n/a		11.56		2.80
2015		n/a		n/a		56.10		8.40
2014		n/a		n/a		115.10		42.30
2013		n/a		n/a		122.50		88.90