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INDEPENDENCE CONTRACT DRILLING, INC. PERFORMANCE UNIT AWARD AGREEMENT TOTAL
SHAREHOLDER RETURN CASH SETTLEMENT Grantee: [NAME] 1. Grant of Performance Unit
Award. (a) As of [DATE] (the “Effective Date”), the date of this agreement (this
“Agreement”), Independence Contract Drilling, Inc., a Delaware corporation (the
“Company”), hereby grants to the Grantee (identified above) ________ restricted
stock units (the “RSUs” or “Target RSUs”) pursuant to the Amended and Restated
Independence Contract Drilling, Inc. 2019 Omnibus Incentive Plan, as may be
amended from time to time (the “Plan”). The RSUs represent the opportunity to
receive a cash payment equal to the Fair Market Value of a share of common stock
on the Vesting Date multiplied by the number of Earned RSU’s (defined below)
determined based upon satisfaction of certain TSR targets and the “Payout
Multiplier” as defined in Exhibit A, subject to Exhibit C. (b) To determine the
number, if any, of RSUs that shall be deemed earned (“Earned RSUs”), the
methodology on Exhibit A shall be followed, subject to Exhibit C. For purposes
of this Agreement, there shall be three performance periods: (a) “Performance
Period I” shall be deemed to begin on the Effective Date and end on the one year
anniversary of the Effective Date (the “Performance Period 1 Determination
Date”); (b) “Performance Period II” shall be deemed to begin on the Effective
Date and end on the second anniversary of the Effective Date (the “Performance
Period II Determination Date”, and (c) “Performance Period III” shall be deemed
to begin on the Effective Date and end on the third anniversary of the Effective
Date (the “Performance Period III Determination Date”). For purposes of this
Agreement, each of Performance Period I, Performance Period II and Performance
Period III shall be considered a “Performance Period”, and each of Performance
Period I Determination Date, Performance Period II Determination Date and
Performance Period III Determination Date shall be considered a “Determination
Date”. It is understood that Earned RSU’s are also subject to a three-year time-
based vesting requirement that begins on the Effective Date, as described in
paragraph 3 below. 2. Definitions. Exhibits A, B and C are incorporated into
this Agreement by reference. Unless otherwise provided, all capitalized terms
used herein shall have the meanings set forth in the Plan, or as set forth in
Exhibits A, B and C. In the event of a conflict between the terms of the Plan
and terms of this Agreement, the terms of the Plan shall control. 1
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3. Vesting and Forfeiture. Subject to Grantee’s continued employment with the
Company or its affiliates (the “Company Group”), and subject further to Exhibits
A, B and C, and any change of control or employment agreement between Grantee
and a member of the Company Group, only RSUs that become Earned RSUs shall have
the opportunity to vest, and Earned RSUs shall vest, if at all, on the third
anniversary of the Effective Date (the “Vesting Date”). RSUs with respect to a
Performance Period that fail to become Earned RSUs as of the respective
Determination Date (as determined by the Committee) shall immediately and
automatically be forfeited for no consideration. Additionally, except to the
extent a change of control or employment agreement between Grantee and a member
of the Company Group provides otherwise, a failure of Grantee to continue his or
her employment through the Vesting Date shall result in an immediate and
automatic forfeiture of outstanding RSUs and Earned RSUs under this Agreement.
4. Purchase Price. No consideration shall be payable by the Grantee to the
Company for the RSUs. 5. Restrictions on RSUs and Settlement of Vested RSUs. (a)
No Dividend Equivalents are granted with respect to any RSUs. (b) Subject to
Section 11(e) and the other terms of the Plan, the Company shall settle vested
Earned RSUs within 30 days of the date such Earned RSUs become vested in
accordance with Section 3, above. Each vested Earned RSU shall entitle the
Grantee to receive a cash payment equal to the Fair Market Value of a share of
Common Stock on the Vesting Date multiplied by the number of Earned RSUs. (c)
Nothing in this Agreement or the Plan shall be construed to: (i) give the
Grantee any right to be awarded any further RSUs or any other Award in the
future, even if RSUs or other Awards are granted on a regular or repeated basis,
as grants of RSUs and other Awards are completely voluntary and made solely in
the discretion of the Committee; (ii) give the Grantee or any other person any
interest in any fund or in any specified asset or assets of the Company or any
Affiliate; or (iii) confer upon the Grantee the right to continue in the
employment or service of the Company or any Affiliate, or affect the right of
the Company or any Affiliate to terminate the employment or service of the
Grantee at any time or for any reason. (d) The Grantee shall not have any voting
rights with respect to the RSUs. 6. Independent Legal and Tax Advice. Grantee
acknowledges that the Company has advised Grantee to obtain independent legal
and tax advice regarding the grant, holding, vesting and settlement of the RSUs
in accordance with this Agreement and any disposition of any such Awards or the
shares of Common Stock issued with respect thereto. 2 HOU:3760738.2

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7. Reorganization of Company. The existence of this Agreement shall not affect
in any way the right or power of the Company or its stockholders to make or
authorize any or all adjustments, recapitalizations, reorganizations or other
changes in the Company’s capital structure or its business, or any merger or
consolidation of the Company, or any issue or bonds, debentures, preferred stock
or the rights thereof, or the dissolution or liquidation of the Company, or any
sale or transfer of all or any part of its assets or business, or any other
corporate act or proceeding, whether of a similar character or otherwise. Except
as otherwise provided herein, in the event of a Corporate Change as defined in
the Plan, Section 4.5 of the Plan shall be applicable. 8. Investment
Representation. Grantee will enter into such written representations, warranties
and agreements as the Company may reasonably request in order to comply with any
federal or state securities law. 9. No Guarantee of Employment. This Agreement
shall not confer upon Grantee any right to continued employment with the Company
or any Affiliate thereof. 10. Withholding of Taxes. The Company or an Affiliate
shall be entitled to satisfy, pursuant to Section 16.3 of the Plan, any and all
tax withholding requirements with respect to RSUs. 11. General. (a) Notices. All
notices under this Agreement shall be mailed or delivered by hand to the parties
at their respective addresses set forth beneath their signatures below or at
such other address as may be designated in writing by either of the parties to
one another, or to their permitted transferees if applicable. Notices shall be
effective upon receipt. (b) Transferability of Award. The rights of the Grantee
pursuant to this Agreement are not transferable by Grantee. No right or benefit
hereunder shall in any manner be liable for or subject to any debts, contracts,
liabilities, obligations or torts of Grantee or any permitted transferee
thereof. Any purported assignment, alienation, pledge, attachment, sale,
transfer or other encumbrance of the RSUs, prior to the lapse of restrictions,
that does not satisfy the requirements hereunder shall be void and unenforceable
against the Company. (c) Amendment and Termination. No amendment, modification
or termination of this Agreement shall be made at any time without the written
consent of Grantee and the Company. (d) No Guarantee of Tax Consequences. The
Company and the Committee make no commitment or guarantee that any federal,
state, local or other tax treatment will (or will not) apply or be available to
any person eligible for compensation or benefits under this Agreement. The
Grantee has been advised and been provided the opportunity to obtain independent
legal and tax advice regarding the granting, vesting and settlement of RSUs
pursuant to the Plan and this Agreement and the disposition of any Common Stock
acquired thereby. (e) Section 409A. The award of RSUs hereunder is intended to
either comply with or be exempt from Section 409A, and the provisions of this
Agreement shall be administered, interpreted and construed accordingly. If the
award of RSUs is not exempt from Section 409A and 3 HOU:3760738.2

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the Grantee is a “specified employee” within the meaning of Section
409A(a)(2)(B)(i) of the Code on the date on which the Grantee has a “separation
from service” (other than due to death) within the meaning of Section
1.409A-1(h) of the Treasury Regulations, then notwithstanding the provisions of
this Agreement, any compensation payable on account of Grantee’s separation from
service that constitute deferred compensation under Section 409A shall take
place on the earlier of (i) the first business day following the expiration of
six months from the Grantee’s separation from service, or (ii) such earlier date
as complies with the requirements of Section 409A. To the extent required under
Section 409A, the Grantee shall be considered to have terminated employment with
the Company or its affiliates (the “Company Group”) when the Grantee incurs a
“separation from service” with respect to the Company Group within the meaning
of Section 409A(a)(2)(A)(i) of the Code. (f) Severability. In the event that any
provision of this Agreement shall be held illegal, invalid or unenforceable for
any reason, such provision shall be fully severable, but shall not affect the
remaining provisions of the Agreement, and the Agreement shall be construed and
enforced as if the illegal, invalid or unenforceable provision had not been
included therein. (g) Supersedes Prior Agreements. This Agreement shall
supersede and replace all prior agreements and understandings, oral or written,
between the Company and the Grantee regarding the grant of the RSUs covered
hereby. (h) Governing Law. This Agreement shall be construed in accordance with
the laws of the State of Delaware without regard to its conflict of law
provisions, to the extent federal law does not supersede and preempt Delaware
law. (i) No Trust or Fund Created. This Agreement shall not create or be
construed to create a trust or separate fund of any kind or a fiduciary
relationship between the Company or any Affiliate and a Grantee or any other
Person. To the extent that any Person acquires a right to receive payments from
the Company or any Affiliates pursuant to this Agreement, such right shall be no
greater than the right of any general unsecured creditor of the Company or any
Affiliate. (j) Clawback Provisions. Notwithstanding any other provisions in this
Agreement or the Change of Control Agreement to the contrary, any
incentive-based compensation, or any other compensation, payable pursuant to
this Agreement or any other agreement or arrangement with the Company or an
affiliate which is subject to recovery under any law, government regulation or
stock exchange listing requirement, will be subject to such deductions and
clawback as may be required to be made pursuant to such law, government
regulation or stock exchange listing requirement (or any policy adopted by the
Company or an affiliate pursuant to such law, government regulation or stock
exchange listing requirement). (k) Restrictive Covenants. Grantee agrees to the
restrictive covenants contained in Exhibit D to this Agreement. (l) Other Laws.
The Company retains the right to refuse to issue or transfer any Stock if it
determines that the issuance or transfer of such shares might violate any
applicable law or regulation or entitle the Company to recover under Section
16(b) of the Securities Exchange Act of 1934. 4 HOU:3760738.2

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(m) Binding Effect. This Agreement shall be binding upon and inure to the
benefit of any successors to the Company and all persons lawfully claiming under
the Grantee. [SIGNATURES ON NEXT PAGE] 5 HOU:3760738.2

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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its
behalf by its duly authorized officer and Grantee has hereunto executed this
Agreement as of the date set forth above. INDEPENDENCE CONTRACT DRILLING, INC.
By: Name: J. Anthony Gallegos Title: President & Chief Executive Officer Address
for Notices: Independence Contract Drilling, Inc. 20475 Hwy 249, Suite 300
Houston, Texas 77070 Attn: Chief Executive Officer GRANTEE [NAME] Address for
Notices: Executive’s then current address shown in the Company’s records. 6
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Exhibit A Methodology for Calculating Earned RSUs 1. Definitions. For purposes
of determining the number of RSUs that are deemed to be Earned RSUs, the
following definitions shall apply: (a) Peer Group means the following eight
companies to the extent such entities or their successors are in existence and
publicly traded as of the Performance End Date: ______________ (b) Total
Shareholder Return or TSR means shall be defined and calculated as follows,
where “Beginning Price” is (1) with respect to the Company or with respect to
members of the Peer Group, the average closing price on the New York Stock
Exchange (“NYSE”) for the last 20 NYSE trading days prior to and including the
Effective Date, and “Ending Price” is the average closing price on the NYSE for
the last 20 NYSE trading prior to and including the applicable Determination
Date, in each case as applied to the applicable equity security: TSR = (Ending
Price – Beginning Price + cash dividends (if any) per share paid*) Beginning
Price * Stock dividends paid in securities rather than cash in which there is a
distribution of less than 25 percent of the outstanding shares (as calculated
prior to the distribution) shall be treated as cash for purposes of this
calculation. To the extent a security of the Company or any member of the Peer
Group is not listed or traded on the NYSE, “NYSE” as used above shall mean the
principal national securities exchange or quotation service on which the
security is listed or quoted. TSR of the Company or of any member of the Peer
Group shall be equitably adjusted, as determined by the Committee, to reflect
any spin-off, stock split, reverse stock split, stock dividend,
recapitalization, reclassification or other similar change in the number of
outstanding shares of common stock. 2. Committee Methodology. The RSUs and
Target RSUs shall be trifurcated into three equal parts, with one-third being
allocated to each Performance Period (to avoid partial shares, the portion of
RSUs and Target RSUs allocated to a specific Performance Period shall be reduced
to the nearest whole number, with the excess rolling forward into the next
sequentially ordered Performance Period). The Committee shall calculate the
number of Earned RSU’s applicable to each Performance Period as soon as
reasonably practicable following expiration of the applicable Performance
Period, and in all events as soon as practicable in order to determine the
number of Earned RSU’s existing on the Vesting Date. Subject to Exhibit C, for
purposes of determining the number of Earned RSUs for a particular Performance
Period, the Committee shall: (a) Calculate the Total Shareholder Return for the
Company and each member of the Peer Group for the Performance Period. 7
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(b) Rank the Company and each member of the Peer Group based on Total
Shareholder Return with the entity having the highest Total Shareholder Return
ranking in the first position and the entity with the lowest Total Shareholder
Return ranking in the ninth position. (c) Determine the Payout Multiplier to be
utilized in determining the number of RSUs that vest, and thus the number of
shares of Common Stock to be issued to the Grantee based on the Payout Schedule
below: Eight Company Payout Schedule Company Ranking Payout Multiplier 1 2.00 2
2.00 3 1.67 4 1.33 5 1.00 6 0.67 7 0.33 8 0.00 9 0.00 (d) For the applicable
Performance Period, calculate the number of Earned RSUs for such Performance
Period as follows: i. Performance Period I: Multiply the number of Target RSUs
allocable to Performance Period I by the Multiplier in the chart above, with
such answer being the Earned RSUs for the Performance Period I. To the extent
the number of RSUs allocated to Performance Period I exceed the Earned RSU’s for
Performance Period I, such excess RSUs shall be immediately and automatically
forfeited. ii. Performance Period II: Multiply the number of Target RSUs
allocable to Performance Period II by the Multiplier in the chart above, with
such answer being the Earned RSUs for the Performance Period II. To the extent
the number of RSUs allocated to Performance Period II exceed the Earned RSU’s
for Performance Period II, such excess RSUs shall be immediately and
automatically forfeited. iii. Performance Period III: Multiply the number of
Target RSUs allocable to Performance Period III by the Multiplier in the chart
above, with such answer being the Earned RSUs for the Performance Period III. To
the extent the number of RSUs allocated to Performance Period III exceed the
Earned RSU’s for Performance Period III, such excess RSUs shall be immediately
and automatically forfeited. 8 HOU:3760738.2

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(e) If any calculation with respect to the number of RSUs that are earned, and
thus the number of shares of Common Stock to be issued hereunder would result in
a fractional share, the number of shares of Common Stock to be issued shall be
rounded down to the nearest whole share. 3. Peer Group Changes. If a member of
the Peer Group declares bankruptcy or ceases to be publicly traded as a result
of bankruptcy, it shall be deemed to remain in the Peer Group until the
expiration of the Performance Period and shall occupy the lowest ranking in the
Payout Schedule. If, as a result of a merger, acquisition or a similar corporate
transaction, in which any member of the Peer Group ceases to be publicly traded,
the Committee may in its sole discretion, revise the makeup of the Peer Group
and calculate the resulting Total Shareholder Return for such affected member of
the Peer Group, adjusting accordingly, the associated Payout Multipliers in a
manner consistent with the methodologies contained herein. 9 HOU:3760738.2

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Exhibit B Certain Definitions. 1. Change of Control shall mean A. The
acquisition by any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of
Rule 13d- 3 promulgated under the Exchange Act) of 50 percent or more of either
(A) the then outstanding shares of common stock or membership interests of the
Company (the “Outstanding Company Common Stock”) or (B) the combined voting
power of the then outstanding voting securities of the Company entitled to vote
generally in the election of directors or managers (the “Outstanding Company
Voting Securities”); provided, however, that for purposes of this subsection A,
the following acquisitions shall not constitute a Change of Control: (1) any
acquisition directly from the Company or any acquisition by the Company; or (2)
any acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company; or (3)
any acquisition by any corporation pursuant to a transaction that complies with
clauses (1), (2) and (3) of subsection C of this definition; or B. Individuals,
who, as of the date hereof constitute the Board (the "Incumbent Board") cease
for any reason to constitute at least a majority of the Board; provided,
however, that any individual becoming a director subsequent to the date hereof
whose election, or nomination for election by the Company's stockholders or
members, was approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such individual was
a member of the Incumbent Board, but excluding, for purpose of this subsection
B, any such individual whose initial assumption of office occurs as a result of
an actual or threatened election contest with respect to the election or removal
of directors or other actual or threatened solicitation of proxies or consents
by or on behalf of a Person other than the Board; or C. Consummation of a
reorganization, merger or consolidation or sale or other disposition of all or
substantially all of the assets of the Company (a "Corporate Transaction") in
each case, unless, following such Corporate Transaction, (1) all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such Corporate Transaction
beneficially own, directly or indirectly, more than 60 percent of, respectively,
the then outstanding shares of common stock and the combined voting power of the
then outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting from such Corporate
Transaction (including, without limitation, a corporation that as a result of
such transaction owns the Company or all or substantially all of the Company's
assets either directly or through one or more subsidiaries) in substantially the
same proportions as their ownership, immediately prior to such Corporate
Transaction, of the Outstanding Company Common Stock and the Outstanding Company
Voting Securities, as the case may be, (2) no Person (excluding any corporation
resulting from 10 HOU:3760738.2

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such Corporate Transaction or any employee benefit plan (or related trust) of
the Company or such corporation resulting from such Corporate Transaction)
beneficially owns, directly or indirectly, 20 percent or more of, respectively,
the then outstanding shares of common stock of the corporation resulting from
such Corporate Transaction or the combined voting power of the then outstanding
voting securities of such corporation except to the extent that such ownership
existed prior to the Corporate Transaction and (3) at least a majority of the
members of the board of directors of the corporation resulting from such
Corporate Transaction were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the Board, providing for
such Corporate Transaction; or D. Approval by the stockholders of the Company of
a complete liquidation or dissolution of the Company. Notwithstanding the
foregoing, however, in any circumstance or transaction in which compensation
would be subject to the income tax under Section 409A if the foregoing
definition of “Change of Control” were to apply, but would not be so subject if
the term “Change of Control” were defined herein to mean a “change in control
event” within the meaning of Treasury Regulation Section 1.409A-3(i)(5), then
“Change of Control” means, but only to the extent necessary to prevent such
compensation from becoming subject to the income tax under Section 409A, a
transaction or circumstance that satisfies the requirements of both (1) a Change
of Control under the applicable clauses (A) through (D) above, as applicable,
and (2) a “change in control event” within the meaning of Treasury Regulation
Section 1.409A-3(i)(5). 11 HOU:3760738.2

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Exhibit C Change of Control. 1. RSUs Becoming Earned RSUs. If prior to any
Determination Date, a Change of Control occurs, and the Grantee has remained
continuously employed by the Company Group from the Effective Date to the date
of such Change of Control, then, notwithstanding any other provision of this
Agreement to the contrary, a portion of the outstanding Target RSUs that have
not previously forfeited or previously converted to Earned RSUs shall
automatically and immediately become Earned RSUs on the date of such Change of
Control in accordance with the following fraction (not greater than 1.0): the
numerator being the number of months (not including any partial months) that
have elapsed since the Effective Date to the date of the Change of Control, and
the denominator being the total number of months in the period beginning on the
Effective Date and ending on the third anniversary of the Effective Date. For
example: a. If the Change of Control occurs prior to the Performance Period I
Determination Date, all Target RSUs (to the extent not previously forfeited) in
all Performance Periods shall be included in the above fraction to determine
what portion of the RSUs are Earned RSUs. b. If the Change of Control occurs
prior to the Performance Period II Determination Date, all Target RSUs subject
to Performance Period II (to the extent not previously forfeited) and all Target
RSUs subject to Performance Period III (to the extent not previously forfeited)
shall be included in the above fraction to determine what portion of RSUs are
Earned RSUs. c. If the Change of Control occurs after the Performance Period II
Determination Date but prior to the Performance Period III Determination Date,
all Target RSUs subject to Performance Period III (to the extent not previously
forfeited) shall be included in the above fraction to determine what portion of
RSUs are Earned RSUs. 2. Earned RSUs Becoming Vested. If a Change of Control
occurs and the Grantee has remained continuously employed by the Company Group
from the Effective Date to the date of such Change of Control, then,
notwithstanding any other provision of this Agreement to the contrary, all
Earned RSU’s (determined after calculating 1, above) shall vest on the date of
such Change of Control. It is understood that to the extent a Change of Control
occurs after an applicable Determination Date or Performance Period, any Earned
RSUs relating to such previously occurring Determination Date and Performance
Period (as determined by the Committee pursuant to Exhibit A) shall be
considered, in addition to the Earned RSUs calculated pursuant to paragraph 1
above, Earned RSUs for purposes of this paragraph 2. 12 HOU:3760738.2

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Exhibit D Restrictive Covenants In consideration for the grant of RSU’s
hereunder, which are expected to vest during Grantee’s employment with the
Company Group over the vesting period, as well as the protection of the Company
Group’s goodwill and Confidential Information, Grantee agrees to the following:
(a) Certain Definitions. For purposes of this Exhibit D, the following terms
shall have the following meanings: (i) “Cause” shall mean Grantee’s: A. willful
and continued failure to comply with the reasonable written directives of the
Company for a period of thirty (30) days after written notice from the Company;
B. willful and persistent inattention to duties for a period of thirty (30) days
after written notice from the Company, or the commission of acts within
employment with the Company Group amounting to gross negligence or willful
misconduct; C. misappropriation of funds or property of the Company Group or
committing any fraud against the Company Group or against any other person or
entity in the course of employment with the Company Group; D. misappropriation
of any corporate opportunity, or otherwise obtaining personal profit from any
transaction which is adverse to the interests of the Company Group or to the
benefits of which the Company Group is entitled; E. conviction of a felony
involving moral turpitude; F. willful failure to comply in any material respect
with the terms of this Agreement and such non-compliance continues uncured after
thirty (30) days after written notice from the Company; G. chronic substance
abuse, including abuse of alcohol, drugs or other substances or use of illegal
narcotics or substances, for which Grantee fails to undertake treatment
immediately after requested by the Company or to complete such treatment and
which abuse continues or resumes after such treatment period, or possession of
illegal narcotics or substances on Company premises or while performing
Grantee’s duties and responsibilities. For purposes of this definition, no act,
or failure to act, by Grantee will be considered “willful” if done, or omitted
to be done, by Grantee in good faith and in the reasonable belief that the act
or omission was in the best interest of the Company or required by applicable
law. 13 HOU:3760738.2

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Any termination during the Employment Term by the Company for Cause shall be
communicated by Notice of Termination to the Grantee. For purposes of this
Agreement, a “Notice of Termination” means a written notice which sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Grantee’s employment for “Cause” The failure by the Company
to set forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Cause shall not waive any right of the Company from
asserting such fact or circumstance in enforcing the Company’s rights hereunder.
(ii) “Confidential Information” means any information, knowledge or data of any
nature and in any form (including information that is electronically transmitted
or stored on any form of magnetic or electronic storage media) relating to the
past, current or prospective business or operations of the Company Group, that
is not generally known to persons engaged in a business similar to that
conducted by the Company Group, whether produced by the Company Group or any of
its consultants, agents or independent contractors or by Grantee, and whether or
not marked confidential. Confidential information does not include information
that (1) at the time of disclosure is, or thereafter becomes, generally
available to the public, (2) prior to or at the time of disclosure was already
in the possession of Grantee, (3) is obtained by Grantee from a third party not
in violation of any contractual, legal or fiduciary obligation to the Company
Group with respect to that information or (3) is independently developed by
Grantee, but not including the confidential information provided by the Company
Group. (iii) “Restricted Business” means any the oil and natural gas land
contract drilling business conducted in the United States of America. (b)
Nondisclosure of Confidential Information. Grantee shall hold in a fiduciary
capacity for the benefit of the Company Group all Confidential Information which
shall have been obtained by Grantee during Grantee’s employment and shall not
use such Confidential Information other than within the scope of Grantee’s
employment with and for the exclusive benefit of the Company Group. Following
any termination of employment with the Company Group, Grantee agrees (i) not to
communicate, divulge or make available to any person or entity (other than the
Company Group) any such Confidential Information, except (A) upon the prior
written authorization of the Company Group, (B) as may be required by law or
legal process, (C) as reasonably necessary in connection with the enforcement of
any right or remedy related to this Agreement, or (D) unless no longer
Confidential Information, and (ii) to deliver promptly to the Company Group any
Confidential Information in Grantee’s possession, including any duplicates
thereof and any notes or other records Grantee has prepared with respect
thereto. In the event that the provisions of any applicable law or the order of
any court would require Grantee to disclose or otherwise make available any
Confidential Information then Grantee shall, to the extent practicable, give the
Company prior written notice of such required disclosure and an opportunity to
contest the requirement of such disclosure or apply for a protective order with
respect to such Confidential Information by appropriate proceedings. (c) Limited
Covenant Not to Compete. In the event Grantee’s employment is terminated by
Grantee for any reason or by the Company Group for Cause, Grantee agrees that 14
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during the period beginning on the date of such termination and ending on the
twelve (12) month anniversary of the date of such termination: (i) Grantee shall
not, directly or indirectly, for himself or others, own, manage, operate,
control or participate in the ownership, management, operation or control of any
business, whether in corporate, proprietorship or partnership form or otherwise,
that is engaged, directly or indirectly, in the United States in the Restricted
Business; provided, however, that the restrictions contained herein shall not
restrict (A) the acquisition by Grantee of less than 2% of the outstanding
capital stock of any publicly traded company engaged in a Restricted Business or
(B) Grantee from being employed by an entity in which the majority of such
entity’s revenues on a consolidated basis determined in accordance with
generally accepted accounting principles are from activities and businesses that
do not constitute a Restricted Business and provided that Grantee is only
employed by and engaged with divisions and units of such entity that are not
engaged in the Restricted Business; and (ii) Grantee shall not, directly or
indirectly (A) solicit any individual, who, at the time of time of such
solicitation is an employee of the Company Group, to leave such employment or
hire, employ or otherwise engage any such individual (other than employees of
the Company Group who respond to general advertisements for employment in
newspapers or other periodicals of general circulation (including trade
journals)), or (B) cause, induce or encourage any material actual or prospective
client, customer, supplier, landlord, lessor or licensor of the Company Group to
terminate or modify any such actual or prospective contractual relationship that
exists on the date of termination of employment. For purposes of clarity, it is
understood that the provisions of this paragraph D are not applicable if
Grantee’s employment with the Company Group is terminated by the Company Group
without Cause. In addition, it is understood that the provisions of this
paragraph C shall terminate in all respects on the fourth anniversary of the
date of the Agreement to which this Exhibit D is a part. (d) Injunctive Relief;
Remedies. The covenants and undertakings contained in this Exhibit D relate to
matters which are of a special, unique and extraordinary character and a
violation of any of the terms of this Exhibit D will cause irreparable injury to
the Company Group, the amount of which will be impossible to estimate or
determine and which cannot be adequately compensated. Accordingly, the remedy at
law for any breach of this Exhibit D may be inadequate. Therefore,
notwithstanding anything to the contrary, the Company will be entitled to an
injunction, restraining order or other equitable relief from any court of
competent jurisdiction in the event of any breach of any provision of this
Exhibit C without the necessity of proving actual damages or posting any bond
whatsoever. The rights and remedies provided by this Exhibit C are cumulative
and in addition to any other rights and remedies which the Company Group may
have hereunder or at law or in equity. The parties hereto further agree that, if
any court of competent jurisdiction in a final nonappealable judgment determines
that a time period, a specified business limitation or any other relevant
feature of this Exhibit D is unreasonable, arbitrary or against public policy,
then 15 HOU:3760738.2

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a lesser time period, geographical area, business limitation or other relevant
feature which is determined by such court to be reasonable, not arbitrary and
not against public policy may be enforced against the applicable party. (e)
Governing Law of this Exhibit D; Consent to Jurisdiction. Any dispute regarding
the reasonableness of the covenants and agreements set forth in this Exhibit C,
or the territorial scope or duration thereof, or the remedies available to the
Company upon any breach of such covenants and agreements, shall be governed by
and interpreted in accordance with the laws of the state of Texas, without
regard to conflict of law provisions thereof, and, with respect to each such
dispute, the Company and Grantee each hereby irrevocably consent to the
exclusive jurisdiction of the State of Texas for resolution of such dispute, and
further agree that service of process may be made upon Grantee in any legal
proceeding relating to this Exhibit D by any means allowed under the laws of
such state. (f) Grantee’s Understanding of this Section. Grantee hereby
represents to the Company that Grantee has read and understands, and agrees to
be bound by, the terms of this Exhibit D. Grantee acknowledges that the
geographic scope and duration of the covenants contained in Exhibit D are the
result of arm’s-length bargaining and are fair and reasonable in light of (i)
the importance of the functions performed by Grantee and the length of time it
would take the Company Group to find and train a suitable replacement, (ii) the
nature and wide geographic scope of the operations of the Company Group, (iii)
Grantee’s level of control over and contact with the Company Group’s business
and operations in all jurisdictions where they are located, and (iv) the fact
that the Restricted Business is potentially conducted throughout the geographic
area where competition is restricted by this Agreement. It is the desire and
intent of the parties that the provisions of this Agreement be enforced to the
fullest extent permitted under applicable law, whether now or hereafter in
effect and therefore, to the extent permitted by applicable law, the parties
hereto waive any provision of applicable law that would render any provision of
this Exhibit D invalid or unenforceable. * * * * * 16 HOU:3760738.2

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