# EDGAR Filing Document

**Accession Number:** 0001537028
**File Stem:** 0001537028-23-000003
**Filing Date:** 2023-2
**Character Count:** 10036
**Document Hash:** d9d2dd4693e52322e3cd021c681b1869
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001537028-23-000003.hdr.sgml**: 20230216

**ACCESSION NUMBER**: 0001537028-23-000003

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 12

**CONFORMED PERIOD OF REPORT**: 20230210

**ITEM INFORMATION**: Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230216

**DATE AS OF CHANGE**: 20230216

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Independence Contract Drilling, Inc.
- **CENTRAL INDEX KEY:** 0001537028
- **STANDARD INDUSTRIAL CLASSIFICATION:** DRILLING OIL & GAS WELLS [1381]
- **IRS NUMBER:** 371653648
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-36590
- **FILM NUMBER:** 23638724

**BUSINESS ADDRESS:**
- **STREET 1:** 20475 STATE HIGHWAY 249
- **STREET 2:** SUITE 300
- **CITY:** HOUSTON
- **STATE:** TX
- **ZIP:** 77070
- **BUSINESS PHONE:** 2815981230

**MAIL ADDRESS:**
- **STREET 1:** 20475 STATE HIGHWAY 249
- **STREET 2:** SUITE 300
- **CITY:** HOUSTON
- **STATE:** TX
- **ZIP:** 77070

?xml version='1.0' encoding='UTF-8'?

------

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 8-K**

**CURRENT REPORT**

**Pursuant to Section 13 or 15(d)**

**of the Securities Exchange Act of 1934**

**Date of Report (Date of earliest event reported): February 10, 2023**

## Independence Contract Drilling, Inc.
**(Exact name of registrant as specified in its charter)**

---

| | | |
|:---|:---|:---|
| **Delaware** | **001-36590** | **37-1653648** |
| **(State or other jurisdiction** | **(Commission** | **(I.R.S. Employer** |
| **of incorporation)** | **File Number)** | **Identification No.)** |

---

**20475 State Highway 249, Suite 300**

**Houston, TX 77070**

**(Address of principal executive offices)**

**(281) 598-1230**

**(Registrant's telephone number, including area code)**

**N/A**

**(Former name or former address, if changed since last report)**

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

**Securities registered pursuant to Section 12(b) of the Act:**

---

| | |
|:---|:---|
| **Title of each class**<br>| **Name of each exchange where registered**<br>|
| Common Stock, $0.01 par value per share<br>ICD<br>| New York Stock Exchange<br>|

---

------

**Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers**

On February 10, 2023, the Compensation Committee of Independence Contract Drilling, Inc. (the "Company") approved the following long-term incentive plan awards to named executive officers:

---

| | | |
|:---|:---|:---|
| **Executive Officer** | **Restricted Stock Units** | **Free-Cash-Flow/Relative TSR Performance Units "Target FCF Units"** |
| **J. Anthony Gallegos Jr.,** *President & Chief Executive Officer* | 121515 | 121515 |
| **Philip A. Choyce,** *Executive Vice President & Chief Financial Officer* | 55229 | 55229 |
| **Philip A. Dalrymple,** *Senior Vice President - Operations* | 25102 | 25102 |
| **Scott A. Keller,** *Senior Vice President - Business Development* | 28996 | 28996 |

---

The restricted stock units ("RSUs") vest in three equal annual installments beginning February 10, 2024. Each restricted stock unit represents the right to receive one share of the Company's common stock on the vesting date. Vested RSU's will be settled two-thirds in shares of the Company's common stock and one-third in cash in amount equal to the fair market value of the common stock on the vesting date for each vested earned RSU.

The Free-Cash Flow / Relative TSR Performance Units ("FCF Units"), to the extent performance measures are met, vest on the third anniversary of the date of grant. Each FCF Unit represents the right to receive 0% to 150% of the Target FCF Units depending upon the Company's actual performance versus various free cash flow and relative TSR metrics. The material terms of the FCF Units include the following:

● Performance will be measured against Free Cash Flow (defined below) targets approved by the Company's Board of Directors for each fiscal year within the three-year award period: 2023; 2024; and 2025. One third of the FCF Units are allocated to each fiscal year performance period.

● The number of FCF Units deemed earned ("Earned Units") and eligible for vesting will be determined by measuring the Company's actual Free Cash Flow calculated from the Company's audited financial statements for each of 2023, 2024 and 2025 against Free Cash Flow targets for each performance year approved by the Company's Board of Directors. To determine Earned Units for each performance period, the number of Target FCF Units allocated to each period will be multiplied by the percentages set forth in the table below (actual performance between levels set forth in the table will be determined by interpolation). Any FCF Units allocated to a performance period that are not deemed to be Earned Units are immediately forfeited.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | &nbsp;&nbsp;**Actual Results Below 80% Target FCF** | &nbsp;&nbsp;**Actual Results**<br>**80% Target**<br>**FCF** | &nbsp;&nbsp;**Actual Results Equal Target FCF** | &nbsp;&nbsp;**Actual Results Equal to or Exceeding 120%+ Target FCF** |
| &nbsp;&nbsp;**Multiple of Target FCF Units Eligible for Vesting** | &nbsp;&nbsp;0% | &nbsp;&nbsp;50% | &nbsp;&nbsp;100% | &nbsp;&nbsp;150% |

---

● No Earned Units will vest until the third anniversary of the date of grant. On the third anniversary of the date of grant, the number of FCF Units that vest, if any, will be determined by multiplying the number of Earned Units for each calendar year performance period by a multiplier (the "TSR Multiplier") based upon the Company's relative total shareholder return for the three year period ending on third anniversary of the date of grant compared to the relative total shareholder return of an eight-company peer group of oilfield service companies for the same period, based upon the following table:

---

| | |
|:---|:---|
| &nbsp;&nbsp;**ICD TSR Ranking Compared to Peer Group** | &nbsp;&nbsp;**TSR Multiplier** |
| &nbsp;&nbsp;1 | &nbsp;&nbsp;115% |
| &nbsp;&nbsp;2 | &nbsp;&nbsp;115% |
| &nbsp;&nbsp;3 | &nbsp;&nbsp;110% |
| &nbsp;&nbsp;4 | &nbsp;&nbsp;105% |
| &nbsp;&nbsp;5 | &nbsp;&nbsp;100% |
| &nbsp;&nbsp;6 | &nbsp;&nbsp;95% |
| &nbsp;&nbsp;7 | &nbsp;&nbsp;90% |
| &nbsp;&nbsp;8 | &nbsp;&nbsp;85% |
| &nbsp;&nbsp;9 | &nbsp;&nbsp;85% |

---

● Vested units will be settled two-thirds in shares of the Company's common stock and one-third in cash in amount equal to the fair market value of the common stock on the vesting date for each vested Earned Unit.

● In the event of a change of control, Earned Units shall immediately vest based upon an assumed TSR multiplier of 100%. If a change of control occurs during or prior to a calendar year performance period, FCF Units allocated to such periods shall vest at the Target level.

● "Free Cash Flow" during an applicable performance period means an amount equal to Adjusted EBITDA less Capital Expenditures. "Adjusted EBITDA" is defined as net income before interest expense, tax expense, depreciation and amortization expense, gain/loss on sale of assets, non-cash impairments, non-cash stock based and deferred compensation expenses, and other non-cash charges. "Capital Expenditures" during an applicable performance period means capital expenditures accrued and incurred in accordance with generally accepted accounting principles applied consistently by the Company less any Excluded Capital Expenditures. "Excluded Capital Expenditures" means Capital Expenditures relating to reactivation or upgrade of a drilling rig not included or contemplated in the Company's annual budget and which is approved by resolution of the Company's Compensation Committee on or prior to the date of commitment and incurrence of such Capital Expenditure.

**Item 9.01 Financial Statements and Exhibits**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Exhibits

---

| | |
|:---|:---|
| **ExhibitNumber**<br>| **Description**<br>|
| 104<br>| Cover Page Interactive Data File (embedded within the Inline XBRL document)<br>|

---

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

---

| | | |
|:---|:---|:---|
|  | **Independence Contract Drilling, Inc.** | **Independence Contract Drilling, Inc.** |
| Date: February 16, 2023 | By: | /s/ Philip A. Choyce |
|  | Name: | Philip A. Choyce |
|  | Title: | Executive Vice President, Chief Financial Officer, Treasurer and Secretary |

---