In May 2018, our shareholders approved the 2018 Long-Term Incentive Plan (the "2018 LTIP") effective January 1, 2018, to provide for the issuance of non-vested share awards, share option awards and performance awards (collectively "awards"). The 2018 LTIP is similar to and replaces the Company's previously adopted 2012 Long-Term Incentive Plan (the “2012 LTIP”). No further awards will be granted under the 2012 LTIP. Under the 2018 LTIP, 14.8 million shares were reserved for issuance as awards to officers, non-employee directors and key employees who are in a position to contribute materially to our growth, development and long-term success. As of December 31, 2019, there were 2.5 million shares available for issuance as awards under the 2018 LTIP. Awards may be satisfied by newly issued shares, including shares held by a subsidiary or affiliated entity, or by delivery of shares held in an affiliated employee benefit trust at the Company's discretion.

In connection with the Rowan Transaction, we assumed the Amended and Restated 2013 Rowan Companies plc Incentive Plan (the "Rowan LTIP") and the non-vested share unit awards, options and share appreciation rights outstanding thereunder. As of December 31, 2019, there were 2.3 million shares remaining available for future issuance as awards under the Rowan LTIP which may be granted to employees and other service providers who were not employed or engaged with Valaris prior to the Rowan Transaction.

In connection with the Atwood Merger, we assumed Atwood’s Amended and Restated 2007 Long-Term Incentive Plan (the “Atwood LTIP”, and together with the 2018 LTIP and the Rowan LTIP, the "LTIP Plans") and the options outstanding thereunder. As of December 31, 2019, there were 100,000 shares remaining available for future issuance as awards under the Atwood LTIP, which may be granted to employees and other service providers who were not employed or engaged with Valaris prior to the Atwood Merger.

Grants of share awards and share units (collectively "share awards") and share units to be settled in cash ("cash-settled awards"), generally vest at rates of 20% or 33% per year, as determined by a committee of the Board of Directors at the time of grant. Additionally, non-employee directors may annually elect to receive deferred share awards. Deferred share awards vest at the earlier of the first anniversary of the grant date or the next annual meeting of shareholders following the grant but are not settled until the director terminates service from the Board. Deferred share awards are settled in cash, shares or a combination thereof at the discretion of the Compensation Committee.

During 2019, no cash-settled awards were granted while 4.5 million share unit awards were granted to our employees and non-employee directors pursuant to the LTIP Plans. Our non-vested share awards have voting and dividend rights effective on the date of grant, and our non-vested share units have dividend rights effective on the date of grant. Compensation expense for share awards is measured at fair value on the date of grant and recognized on a straight-line basis over the requisite service period (usually the vesting period). Compensation expense for cash-settled awards is remeasured each quarter with a cumulative adjustment to compensation cost during the period based on changes in our share price. Our compensation cost is reduced for forfeited awards in the period in which the forfeitures occur.



	Share Awards						Cash-Settled Awards
	2019		2018		2017		2019		2018		2017
Weighted-average grant-date fair value of share awards granted (per share)	$	11.50	$	24.62	$	31.48	$	—	$	21.35	$	25.08
Total fair value of share awards vested during the period (in millions)	$	17.7	$	7.5	$	8.2	$	3.5	$	9.9	$	3.9



	Share Awards				Cash-settled Awards
	Awards		Weighted-Average Grant-Date Fair Value		Awards		Weighted-Average Grant-Date Fair Value
Share awards and cash-settled awards as of December 31, 2018	2,017		$	31.36	1,279		$	29.20
Granted	4,460		11.50		—		—
Rowan share awards assumed	2,329		15.88		—		—
Vested	(1,519	)	10.53		(453	)	7.97
Forfeited	(854	)	8.87		(129	)	11.58
Share awards and cash-settled awards as of December 31, 2019	6,433		$	19.89	697		$	46.28

As of December 31, 2019, there was $115.9 million of total unrecognized compensation cost related to share awards, which is expected to be recognized over a weighted-average period of 1.7 years.

Share Appreciation Rights ("SARs") granted to employees generally become exercisable in 33% increments over a three-year period and, to the extent not exercised, expire on the tenth anniversary of the date of grant. The exercise price of SARs granted under the Rowan LTIP equals the excess of the market value of the underlying shares on the date of exercise over the market value of the shares on date of grant multiplied by the number of shares covered by the SAR. The Company intends to share-settle any exercises of SARs and has therefore accounted for SARs as equity awards. As of December 31, 2019, SARs granted to purchase 530,923 shares with a weighted-average exercise price of $50.70 were outstanding under the Rowan LTIP. No SARs have been granted since 2010 under the Rowan LTIP, and there was no unrecognized compensation cost related to SARs as of December 31, 2019.

Share option awards ("options") granted to employees generally become exercisable in 25% increments over a four-year period or 33% increments over a three-year period or 100% after a four - year period and, to the extent not exercised, expire on either the seventh or tenth anniversary of the date of grant. The exercise price of options granted under the 2018 LTIP equals the market value of the underlying shares on the date of grant. As of December 31, 2019, options granted to purchase 375,701 shares with a weighted-average exercise price of $52.77 were outstanding under the Company LTIPs. Excluding options assumed under the Atwood LTIP, no options have been granted since 2011, and there was no unrecognized compensation cost related to options as of December 31, 2019.

Under the Company LTIPs, performance awards may be issued to our senior executive officers. The 2019 performance awards are subject to achievement of specified performance goals based on both relative and absolute total shareholder return ("TSR"), while the 2017 and 2018 performance awards are subject to achievement of specified performance goals based on relative TSR and relative return on capital employed ("ROCE") as compared to a specified peer group. The performance goals are determined by a committee or subcommittee of the Board of Directors. Awards are payable in either Valaris shares or cash upon attainment of relative TSR and ROCE performance goals. Performance awards granted since 2017 are payable in cash.

Performance awards generally vest at the end of a three-year measurement period based on attainment of performance goals. Our performance awards granted during 2017, 2018 and 2019 are classified as liability awards, all

with compensation expense recognized over the requisite service period. The estimated probable outcome of attainment of the specified performance goals is based primarily on relative performance over the requisite performance period. Any subsequent changes in this estimate are recognized as a cumulative adjustment to compensation cost in the period in which the change in estimate occurs.

The aggregate grant-date fair value of performance awards granted during 2019, 2018 and 2017 totaled $6.7 million. The aggregate fair value of performance awards vested during 2019, 2018 and 2017 totaled $2.2 million, $0.7 million and $2.9 million, respectively.

During the years ended December 31, 2019, 2018 and 2017, we recognized $3.2 million, $8.2 million and $8.4 million of compensation expense for performance awards, respectively, which was included in general and administrative expense in our consolidated statements of operations. As of December 31, 2019, there was $0.8 million of total unrecognized compensation cost related to unvested performance awards, which is expected to be recognized over a weighted-average period of 1.1 years.

We have savings plans, (the Ensco Savings Plan, the Ensco Multinational Savings Plan, the Ensco Limited Retirement Plan, the Rowan Companies, Inc. Savings & Investment Plan (the "Rowan Savings Plan"), the RDIS International Savings Plan and the Rowan Drilling UK Pension Scheme), which cover eligible employees as defined within each plan. The Ensco Savings Plan and the Rowan Savings Plan include a 401(k) savings plan feature, which allows eligible employees to make tax-deferred contributions to the plans. The Ensco Limited Retirement Plan and the Rowan Drilling UK Pension Scheme also allows eligible employees to make tax-deferred contributions to the plan. Contributions made to the Ensco Multinational Savings Plan and the RDIS International Savings Plan may or may not qualify for tax deferral based on each plan participant's local tax requirements.

We generally make matching cash contributions to the plans. The legacy Ensco plans match 100% of the amount contributed by the employee up to a maximum of 5% of eligible salary, where the legacy Rowan plans also provide up to a 5% match of eligible salary; however, depending on the plan and the tier, the match percentage could vary. Matching contributions totaled $18.7 million, $14.4 million and $12.2 million for the years ended December 31, 2019, 2018 and 2017, respectively. Any additional discretionary contributions made into the plans require approval of the Board of Directors and are generally paid in cash. As of January 1, 2019, the plans were modified such that all previous, current and future employer contributions become 100% vested. We have 1.0 million shares reserved for issuance as matching contributions under the Ensco Savings Plan.