Document:

changeofcontrolagreement

                     CHANGE OF CONTROL AGREEMENT         THIS CHANGE OF CONTROL AGREEMENT           (the “Agreement ”), made and entered   into  effective  as  of  December  26,  2018  (the  “Effective  Date ”),  by  and  between  Independence  Contract Drilling, Inc., a Delaware corporation (the “Company ”), and Travis Fitts (“Executive ”).         WHEREAS    , the Company and Executive desire to enter into an agreement regarding their   respective rights and obligations in connection with a Change of Control during the Term of this   Agreement;          THEREFORE   , for good and valuable consideration, the receipt and sufficiency of which   are hereby acknowledged, the Company and Executive agree as follows:           1.    Term .  This Agreement shall begin on the Effective Date and shall end on the third   anniversary of the Effective Date (the “Term ”); provided, however , if neither party shall have  provided written notice of termination at least one (1) year prior to the scheduled expiration of the  then current term of this Agreement (each such date by which such notice must be provided, a  “Renewal Date ”), the Term shall automatically be extended for one (1) additional year so as to  expire two (2)  years from such Renewal Date.  Upon a Change of Control, the Term shall be  automatically extended to the third anniversary of the Change of Control.         2.    Qualifying Termination .  Subject to the terms of this Agreement, if a Qualifying  Termination  occurs  with  respect  to  the  Executive,  Executive  shall  be  entitled  to  the  benefits  provided in Section 3 hereof.  If Executive’s employment terminates for any reason other than for  a  Qualifying  Termination,  then  Executive  shall  not be  entitled  to  any  benefits  under  this  Agreement; provided  that Executive’s right to receive the Accrued Obligations, if any, shall not  be affected by this Agreement.         3.    Benefits Upon a Qualifying Termination .         (a)   Lump Sum  .  Subject to Section 3(c) and 3(d), if a Qualifying Termination occurs  with respect to the Executive, then in addition to the Accrued Obligations, for which no Release  of Claims is required, the Company shall pay to Executive, on the 60th day following the Date of  Qualifying Termination, an amount, in a single lump sum payment, equal to the sum of:         (i)   Any earned but unpaid Annual Bonus related to the fiscal year prior to the fiscal  year in which the Date of Termination occurs plus ;          (ii)  An amount equal to the product of (x) the Target Annual Bonus for the fiscal year  in which the Date of Termination occurs, and (y) a fraction, the numerator of which is the number  of  days  in  the  current  fiscal  year  that  have  elapsed  through  the  Date  of Termination,  and  the  denominator of which is 365 ; plus          (iii)  An amount equal to one times the sum of (x) the Executive’s Base Salary (at the  rate in effect as of the Date of Termination) and (y) the Target Annual Bonus for the fiscal year in  which the Date of Termination occurs.   

 

      (b)   Awards .  Subject to Section 3(c) and 3(d), if a Qualifying Termination occurs with   respect to the Executive, then (i) except as expressly prohibited as of the Effective Date by the   terms of the applicable plan under which any such award is granted, all outstanding awards and   benefits held by the Executive under the Company’s equity or long-term incentive compensation   plan, including all stock options and restricted stock held by the Executive, not already vested,   shall be 100% vested.          (c)   Release .  Notwithstanding anything in this Agreement to the contrary, no payment   other than payment of the Accrued Obligations shall be made or benefits provided pursuant to this   Agreement unless and until Executive signs and returns to the Company within fifty (50) days   following  the  date  of  a  Qualifying  Termination,  and  does  not  revoke  within  seven  (7)  days   thereafter, a release and waiver agreement (the “Release of Claims ”) in substantially the same   form as that attached hereto as Exhibit A, in exchange for the benefits described in this Section 3,  releasing  and  waiving  all  claims  for  liability  and damages  in  any  way  related  to  Executive’s  employment against the Company, its affiliates, their directors, officers, employees and agents,  and their employee benefit plans and fiduciaries and agents of such plans.         (d)   Section 409A Rules.         (i)   This  Agreement  is  intended  to  comply  with  the  Section  409A  Rules  and  any  ambiguous provisions will be construed in a manner that is compliant with or exempt from the  application  of  the  Section  409A  Rules.   If  a  provision  of  the Agreement  would  result  in  the  imposition of applicable taxes and interest under the Section 409A Rules, such provision may be  reformed to avoid, to the extent possible, imposition of such taxes and interest and no action taken  to comply with the Section 409A Rules shall be deemed to adversely affect any rights or benefits  of Executive hereunder.  For purposes of the Section 409A Rules, each payment or amount due  under this Agreement shall be considered a separate payment, and Executive’s entitlement to a  series of payments under this Agreement shall be treated as an entitlement to a series of separate  payments.         (ii)  To the extent that any reimbursement or benefit in kind hereunder needs to comply  with  the  Section  409A  Rules,  such  reimbursement  or benefit  in  kind  shall  be  administered  in  accordance with Treasury Regulation Section 1.409A-3(i)(1)(iv).  Specifically, (A) the applicable  reimbursements and benefits in kind shall be such reimbursements and benefits in kind allowable  pursuant to the Company’s standard policies and procedures as apply to the Company’s executive  employees  generally,  (B)  the  amounts  reimbursed  and  in-kind  benefits  under  this Agreement  during  Executive’s  taxable  year  may  not  affect  the amounts  reimbursed  or  in-kind  benefits  provided in any other taxable year, (C) the reimbursement of an eligible expense shall be made on  or before the last day of Executive’s taxable year following the taxable year in which the expense  was incurred, (D) the right to reimbursement or an in-kind benefit is not subject to liquidation or  exchange  for  another  benefit,  and  (E)  the  right  to reimbursement  of  expenses  incurred  or  to  provision of benefits in kind shall terminate no later than one (1) year from Executive’s Date of  Termination.         (iii)  If Executive is a “specified employee” within the meaning of the Section 409A  Rules  as  of  his  Date  of  Termination,  no  distributions  or  benefits  that  are  subject  to,  and  not  otherwise exempt from, the Section 409A Rules shall be made under this Agreement before the                                          2    

 

date that is six (6) months and two (2) days after the Date of Termination (or, if earlier, the date of  Executive’s death) and any such delayed distributions or benefits shall be made as of such date  without interest.         4.    Restrictions and Obligations of Executive .         (a)   Access to, and Acknowledgement of Value of, Confidential Information .  The  Company  has  previously  made  available  to  Executive Confidential  Information  regarding  the  Company  and  its  business  operations,  and  the  Company  agrees  to  provide  Executive  with  (i) Confidential Information regarding the Company and its business operations arising after the  date hereof and (ii) access to certain of the Company’s customers, prospective customers, vendors  and other parties with whom the Company conducts business, which will allow Executive the  opportunity  to  develop  business  relationships  and  goodwill  with  such  customers,  prospective  customers,  vendors  and  other  such  parties  after  the  date  hereof.   Executive  acknowledges  and  agrees that the Confidential Information is of significant value to the Company and the protection  against  unauthorized  disclosure  and  use  of  the  Confidential  Information  and  the  business  relationships and goodwill that may be developed by Executive in performing his/her duties on  behalf of the Company is of critical importance to the Company.  The Company and Executive  agree that in addition to the Company’s disclosure of the Confidential Information and the business  relationships and goodwill that may be developed by Executive in performing his duties on behalf  of the Company, the Company’s agreement to make the payments provided in this Agreement to  Executive  constitutes  additional  consideration  for the  Executive’s  compliance  with  the  undertakings set forth in this Section 4.  Notwithstanding any other provision of this Agreement to  the contrary, Executive  shall only be required to comply  with the provisions of this Section 4  following  the  Date  of Termination  if  Executive  receives  the  benefits  as  provided  in  Section  3  above.         (b)   Confidentiality .   Executive  acknowledges  that  the  Company  has  previously  provided Executive with Confidential Information and will continue to provide Executive with  Confidential  Information.   Executive  agrees  that  Executive  will  not,  while  employed  by  the  Company or any affiliate and at any time thereafter, disclose or make available to any other person  or entity, or use for Executive’s own personal gain, any Confidential Information, except for such  disclosures as required in the performance of Executive’s duties with the Company or  as may  otherwise be required by law or legal process (in which case Executive shall notify the Company  of such legal or judicial proceeding as soon as practicable following his receipt of notice of such a  proceeding, and permit the Company to seek to protect its interests and information).  Executive  acknowledges  and  agrees  that  such  Confidential  Information  is  the  exclusive  property  of  the  Company and will only be used for the benefit of the Company.  Further, Executive waives and  releases any claim that he/she should be able to use, for the benefit of any competing person or  entity, Confidential Information that was received by Executive while working for the Company.         Nothing  contained  in  this  Section  4  shall  prohibit or  otherwise  restrict  Executive  from  acquiring  or  owning,  directly  or  indirectly,  for  passive  investment  purposes  not  intended  to  circumvent this Agreement, securities of any entity engaged, directly or indirectly, in a Restricted  Business if such entity is a public entity and Executive (i) is not a controlling Person of, or a  member of a group that controls, such entity and (ii) owns, directly or indirectly, no more than 3%  of any class of equity securities of such entity.                                          3    

 

      (c)   Injunctive Relief .  Executive acknowledges that monetary damages for any breach   of Section 4(b) above will not be an adequate remedy and that irreparable injury will result to the   Company, its business and property, in the event of such a breach.  For that reason, Executive   agrees  that  in  the  event  of  a  breach,  in  addition  to  recovering  legal  damages,  the  Company  is   entitled to proceed in equity for specific performance or to enjoin Executive from violating such   provisions.          (d)   Severability .   The  Executive  acknowledges  and  agrees  that  the  restrictive  covenants set forth in this Section 4 are reasonable and necessary in order to protect the Company’s  valid business interests.  It is the intention of the parties hereto that the covenants, provisions and  agreements  contained  herein  shall  be  enforceable  to  the  fullest  extent  allowed  by  law.   If  any  covenant, provision or agreement contained herein is found by a court having jurisdiction to be  unreasonable in duration, scope or character of restrictions, or otherwise to be unenforceable, such  covenant,  provision  or  agreement  shall  not  be  rendered  unenforceable  thereby,  but  rather  the  duration,  scope  or  character  of  restrictions  of  such  covenant,  provision  or  agreement  shall  be  deemed  reduced  or  modified  with  retroactive  effect to  render  such  covenant,  provision  or  agreement reasonable or otherwise enforceable (as the case may be), and such covenant, provision  or agreement shall be enforced as modified.  If the court having jurisdiction will not review the  covenant, provision or agreement, the parties hereto shall mutually agree to a revision having an  effect as close as permitted by applicable law to the provision declared unenforceable.  The parties  hereto agree that if a court having jurisdiction determines, despite the express intent of the parties  hereto,  that  any  portion  of  the  covenants,  provisions  or  agreements  contained  herein  are  not  enforceable, the remaining covenants, provisions or agreements of this Section 4 shall be valid and  enforceable.  Moreover, to the extent that any provision is declared unenforceable, the Company  shall have any and all rights under applicable statutes or common law to enforce its rights with  respect to any and all Confidential Information or unfair competition by the Executive.         5.    Parachute Payment Limitation .          (a)   Anything in this Agreement to the contrary notwithstanding, if the Executive is a  “disqualified individual” (as defined in Section 280G of the Code), and the severance benefits  provided  in  Section  3,  together  with  any  other  payments  which  the  Executive  has  the  right  to  receive, would constitute a “parachute payment” (as defined in Section 280G of the Code), the  severance  benefits  provided  hereunder  that  constitute  a  parachute  payment  shall  be  either  (i) reduced (but not below zero) so that the aggregate present value of such payments received by  the Executive from the Company will be one dollar ($1.00) less than three times the Executive’s  “base amount” (as defined in Section 280G of the Code) and so that no portion of such payments  received by the Executive shall be subject to the excise tax imposed by Section 4999 of the Code,  or (ii) paid in full, whichever produces the better net after-tax result for the Executive (taking into  account any applicable excise tax under Section 4999 of the Code and any other applicable taxes).          (b)   In  making  any  reductions  pursuant  to  Section  5(a), above,  the  Company  shall  reduce or eliminate amounts first by reducing those amounts that are not payable in cash, and then  by reducing or eliminating cash amounts, in each case in reverse order beginning with amounts, if  any, that are to be paid the farthest in time from the Date of Qualifying Termination; provided ,  however , that no amount that is subject to the Section 409A Rules shall be reduced or eliminated  until all amounts that are not subject to the Section 409A Rules have been eliminated, and then all                                          4    

 

such amounts that are subject to the Section 409A Rules shall not be reduced in reverse order but  shall be reduced proportionally.  The determination of the base amount, the present value of the  parachute  payments,  and  the  amount  of  any  benefit  to  be  reduced  shall  be  determined  by  the  Company’s independent auditors, or such other nationally recognized accounting firm mutually  acceptable to the Company and Executive, in accordance with the principles of Section 280G of  the  Code  and  based  upon  the  advice  of  any  tax  counsel  selected  by  such  auditors  or  other  accounting firm.  If a reduced payment is made and through error or otherwise that payment, when  aggregated  with  other  payments  from  the  Company  (or  its  affiliates)  used  in  determining  if  a  “parachute payment” exists, exceeds one dollar ($1.00) less than three times the Executive’s base  amount, the Executive shall immediately repay such excess to the Company upon notification that  an overpayment has been made.         6.    Miscellaneous Provisions .         (a)   Definitions Incorporated by Reference .  Reference is made to Annex I hereto for  definitions  of  certain  capitalized  terms  used  in  this  Agreement,  and  such  definitions  are  incorporated herein by such reference with the same effect as if set forth herein.         (b)   Cooperation .  If Executive becomes entitled to benefits under Section 3 of this  Agreement,  Executive  agrees,  for  a  one  (1)  year  period  following  the  Date  of Termination,  to  provide reasonable cooperation to the Company in response to reasonable requests made by the  Company for information or assistance, including but not limited to, participating upon reasonable  notice in conferences and meetings, providing documents or information, aiding in the analysis of  documents, or complying with any other reasonable requests by the Company including execution  of  any  agreements  that  are  reasonably  necessary, provided   such  cooperation  relates  to  matters   concerning Executive’s duties with the Company and the requests do not, in the good faith opinion   of Executive, materially interfere with Executive’s other activities.          (c)  Successors; Binding Agreement .          (i)   Except in the case of a merger involving the Company with respect to which under  applicable law the surviving corporation of such merger will be obligated under this Agreement in  the same manner and to the same extent as the Company would have been required if no such  merger had taken place, the Company will require any successor, by purchase or otherwise, to all  or substantially all of the business and/or assets of the Company, to execute an agreement whereby  such successor expressly assumes and agrees to perform this Agreement in the same manner and  to the same extent as the Company would have been required if no such succession had taken place  and expressly agrees that Executive may enforce this Agreement against such successor.  As used  in this Agreement, “Company” shall mean the Company as hereinbefore defined and any successor  to its business and/or assets as aforesaid that executes and delivers the agreement provided for in  this Section 6(c)(i) or which otherwise becomes  bound by  all the terms and provisions of this  Agreement by operation of law.         (ii)  This Agreement  shall  inure  to  the  benefit  of  and  be  enforceable  by  Executive’s  personal  or  legal  representatives,  executors,  administrators,  successors,  heirs,  distributees,  devisees and legatees.  If Executive should die prior to payment of any amount that is otherwise                                           5    

 

payable under this Agreement, any such amount shall be paid in accordance with the terms of this  Agreement to Executive’s estate.         (d)   Notice .  All notices, consents, waivers, and other communications required under  this Agreement must be in writing and will be deemed to have been duly given when (i) delivered  by hand (with written confirmation of receipt), (ii) sent by facsimile (with confirmation of receipt),  provided  that a copy is mailed by certified mail, return receipt requested, or (iii) when received by  the addressee, if sent by a nationally recognized overnight delivery service, in each case to the  appropriate  addresses  and  facsimile  numbers  set  forth  below  (or  to  such  other  addresses  and  facsimile numbers as a party may designate by notice to the other parties):         If to the Company:          Independence Contract Drilling, Inc.        20475 Hwy 249, Suite 300        Houston, Texas  77070        Attn: Chief Executive Officer         If to Executive:         At Executive’s then current address shown in the Company’s records         (e)   Miscellaneous .   No  provisions  of  this Agreement  may  be  modified,  waived  or  discharged  unless  such  waiver,  modification  or  discharge  is  agreed  to  in  writing  signed  by  Executive and by an officer of the Company authorized by the Board.  No waiver by either party  hereto at any time of any breach by the other party hereto of, or compliance with, any condition or  provision of this Agreement to be performed by such other party shall be deemed a waiver of  similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.         (f)   Validity .  The interpretation, construction and performance of this Agreement shall  be governed by and construed and enforced in accordance with the laws of the State of Texas  without regard to conflicts of laws principles.  The invalidity or unenforceability of any provisions  of  this Agreement  shall  not  affect  the  validity  or enforceability  of  any  other  provision  of  this  Agreement, each of which shall remain in full force and effect.         (g)   Counterparts .  This Agreement may be executed in one or more counterparts, each  of which shall be deemed to be an original but all of which together shall constitute one and the  same instrument.         (h)   Descriptive Headings .  Descriptive headings are for convenience only and shall  not control or affect the meaning or construction of any provision of this Agreement.         (i)   Corporate Approval .   This Agreement  has  been  approved  by  the  Board,  or  a  committee thereof, and has been duly executed and delivered by Executive and on behalf of the  Company by its duly authorized representative.         (j)   Disputes .  The parties agree to resolve any claim or controversy arising out of or  relating  to  this Agreement  by  binding  arbitration  under  the  Federal Arbitration Act  before  one                                          6    

 

arbitrator  in  the  City  of  Houston,  State  of  Texas, administered  by  the  American  Arbitration  Association under its Commercial Arbitration Rules, and judgment on the award rendered by the  arbitrator may be entered in any court having jurisdiction thereof.  The Company shall reimburse  Executive, on a current basis, for all legal fees and expenses incurred by Executive in connection  with any dispute arising under this Agreement, including, without limitation, the fees and expenses  of the arbitrator, unless the arbitrator finds Executive brought such claim in bad faith, in which  event each party shall pay its own costs and expenses and Executive shall repay to the Company  any fees and expenses previously paid on Executive’s behalf by the Company.         The parties stipulate that the provisions hereof shall be a complete defense to any suit,  action, or proceeding instituted in any federal, state, or local court or before any administrative  tribunal with respect to any controversy or dispute arising during the period of this Agreement and  which is arbitrable as herein set forth.  The arbitration provisions hereof shall, with respect to such   controversy or dispute, survive the termination of this Agreement.         (k)   Withholding of Taxes .  The Company may withhold from any amounts payable  under  this Agreement  or  otherwise  in  connection  with  your  employment  all  taxes  and  other  amounts it is required to withhold pursuant to any applicable law or regulation or otherwise.         (l)   No Guarantee of Tax Consequences .  The Company makes no commitment or  guarantee to Executive or any other person that any federal, state, local or other tax treatment will  (or will not) apply or be available to any person eligible for benefits under this Agreement and  assumes  no  liability  whatsoever  for  the  tax  consequences  to  Executive  or  to  any  other  person  eligible for benefits under this Agreement.         (m)   Clawback Provisions .  Notwithstanding any other provisions in this 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 any such law, government regulation or stock exchange listing  requirement).         (n)   No Employment Agreement .  Nothing in this Agreement shall give Executive any  rights to continued employment by or other service with the Company or any of its affiliates or  any  successors,  nor  shall  it  restrict  in  any  way  the  rights  of  the  Company,  or  your  rights,  to  terminate  Executive’s  employment  or  other  service  relationship  with  the  Company  and  its  affiliates.         (o)   Entire Agreement .  This instrument contains the entire agreement of Executive  and  the  Company  with  respect  to  the  subject  matter hereof,  and  hereby  expressly  terminates,  rescinds  and  replaces  in  full  any  prior  and  contemporaneous  promises,  representations,  understandings, arrangements and agreements between the parties relating to the subject matter  hereof, whether written or oral.  However, nothing in this Agreement shall affect Executive’s rights  under such compensation and benefit plans and programs of the Company in which Executive may  participate, except as may be explicitly provided in this Agreement.                                           7    

 

         IN WITNESS WHEREOF, the Company and Executive have executed this Agreement in  one or more counterparts effective for all purposes as of the Effective Date.                                    INDEPENDENCE CONTRACT DRILLING, INC.                                                                                                         By:    /s/ Anthony Gallegos                                   Name:  J. Anthony Gallegos                                   Title:   President & Chief Executive Officer                                                                                                         EXECUTIVE                                                                                                            /s/ Travis Fitts                                   Travis Fitts                                                                      8    

 

                                   ANNEX I                                        TO                       CHANGE OF CONTROL AGREEMENT     Definitions:         1.    Accrued Obligations .  “Accrued Obligations” shall mean the aggregate amount of  (i) any earned but unpaid Base Salary; (ii) accrued but unpaid vacation pay through the Date of  Termination; (iii) any unreimbursed reasonable business expenses incurred by Executive prior to  the Date of Termination that are reimbursable in accordance with the policies and procedures of  the Company; and (iv) such employee benefits, if any, as to which Executive may be entitled  pursuant  to  the  terms  governing  such  benefits,  payable  in  accordance  with  the  terms  of  the  applicable plan or other arrangement governing such benefits.         2.    Annual  Bonus .   “Annual  Bonus”  shall  mean  (i)  any  annual  incentive  award(s)  payable  to  Executive  pursuant  to  the  Company’s  2012  Omnibus  Incentive  Plan,  as  may  be  amended and restated from time to time, or any successor plan as adopted by the Company; and  (ii) any other annual cash incentive or bonus award(s) granted by the Company to the Executive.         3.    Base Salary .  “Base Salary” shall mean an Executive’s highest annual rate of base  salary in effect at any time during the period beginning six (6) months preceding the Change of  Control  and  throughout  the  Protected  Period,  without  reduction  by  payroll  deductions  and  withholdings, including but not limited to, elective contributions made on the Executive’s behalf  pursuant to a plan maintained under Code Sections 125 or 401, and any other reductions of the  Executive’s remuneration, but excluding bonuses, severance pay and other amounts in lieu of base  salary and any other amounts not considered base salary under the Company’s normal payroll  practices.         4.    Board .  “Board” shall mean the Board of Directors of the Company.         5.    Cause .  “Cause” shall mean the following:          (i)   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;           (ii)  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   amounting to gross negligence or willful misconduct;           (iii)  misappropriation of funds or property of the Company or committing any fraud   against  the  Company  or  its  affiliates  or  against  any  other  person  or  entity  in  the  course  of   employment with the Company or its affiliates;           (iv)  misappropriation  of  any  corporate  opportunity,  or  otherwise  obtaining  personal   profit from any transaction which is adverse to the interests of the Company or its affiliates or to   the benefits of which the Company or its affiliates are entitled;                                           9    

 

      (v)   conviction of a crime involving moral turpitude or of a felony;          (vi)   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; or          (vii)  chronic substance abuse, including abuse of alcohol, drugs or other substances or  use of illegal narcotics or substances, for which Executive 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 Executive’s duties and responsibilities.         For purposes of this definition, no act, or failure to act, by Executive will be considered  “willful” if done, or omitted to be done, by Executive 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.   Any termination during the Term by the Company for Cause shall be communicated by Notice of  Termination to the other party hereto given in accordance with this Agreement.          6.    Change of Control .  A “Change of Control” shall mean:           (i)   The acquisition by any 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  (i),  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 (iii) of this definition ;           (ii)  Individuals,  who,  as  of  the  date  hereof  (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, 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;          (iii)  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                                         10    

 

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 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          (iv)  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 the Section 409A Rules 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 the  Section 409A Rules, a transaction or circumstance that satisfies the requirements of both (1) a  Change of Control under the applicable clauses (i) through (iv) above, as applicable, and (2) a  “change in control event” within the meaning of Treasury Regulation Section 1.409A-3(i)(5).         7.    Code .  “Code” shall mean the Internal Revenue Code of 1986, as amended, and the  regulations and administrative guidance promulgated thereunder.         8.    Confidential  Information .   “Confidential  Information”  means  and  includes  all  confidential and/or proprietary information, trade secrets and “know-how” and compilations of  information of any kind, type or nature (tangible and intangible, written or oral, and including  information contained, stored or transmitted through any electronic medium), whether owned by  the Company or its affiliated companies, disclosed to the Company or its affiliated companies in  confidence  by  third  parties  or  licensed  from  any  third  parties,  which,  at  any  time  during  Executive’s  employment  by  the  Company,  is  developed,  designed  or  discovered  or  otherwise  acquired or learned by Executive and which relates to the Company or its affiliated companies,  partners, business, services, products, processes, properties or assets, customers, clients, suppliers,  vendors or markets or such third parties.  Notwithstanding the foregoing, Confidential Information  shall not include any information that becomes generally available to the public other than as a  result of any disclosure or act of Executive in violation of the terms of this Agreement.                                         11    

 

      9.    Date of Qualifying Termination .  “Date of Qualifying Termination” shall mean,  assuming a Qualifying Termination occurs, the date of such Termination.         10.   Date  of  Termination .   “Date  of  Termination”  shall  mean  the  date  Executive  experiences a Termination.         11.   Disability .  “Disability” means Executive will be deemed “Disabled,” if Executive   shall have been unable to substantially perform Executive’s duties as an executive of the Company   or  any  subsidiary  thereof  as  a  result  of  sickness  or  injury,  with  or  without  reasonable   accommodation, and shall have remained unable to perform any such duties for a period of more   than one hundred twenty (120) days in any twelve (12) month period.  If the Company determines   that Executive has become Disabled, the Company shall notify Executive of its determination.    Executive may then request an accommodation from the Company to assist in his/her return to   work.  The Company will determine whether Executive’s request can be accommodated without   undue hardship no later than thirty (30) days after Executive requests an accommodation.  In the   event Executive’s request cannot be accommodated, the Company may, by notice given in the   manner  provided  in  this  Agreement,  terminate  the  status  of  Executive  as  an  executive  and   employee of the Company.  Any such termination shall become effective thirty (30) days after   such notice of termination is given, unless within such thirty (30) day period, Executive becomes   capable of rendering services of the character contemplated hereby (and a physician chosen by the   Company so certifies in writing) and Executive in fact resumes such services.          12.   Exchange Act .  “Exchange Act” shall mean the Securities Exchange Act of 1934,   as amended.          13.   Good Reason .  “Good Reason” shall mean the occurrence of any of the following   without Executive’s express written consent:          (a)   any action or inaction that constitutes a material breach by the Company of this   Agreement and such action or inaction continues uncured after thirty (30) days following written   notice from the Executive;          (b)   the assignment to the Executive of any duties that are a diminution in any respect  from  the  Executive’s  position  (including  status,  offices,  titles  and  reporting  requirements),  authority,  duties  or  responsibilities  with  respect to  the  Company,  or  any  other  action  by  the  Company  which  results  in  a  diminution  in  such  position,  authority,  duties  or  responsibilities,  excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith  and which is remedied by the Company within thirty (30) days of receipt of written notice thereof  given by the Executive.         (c)   a change in the  geographic location  at which Executive must normally  perform  services to a location more than fifty (50) miles from Houston, Texas or the location at which  Executive normally performs such services as of the Effective Date; or         (d)   in the event a Change of Control has occurred, the assignment to the Executive to  any  position  (including  status,  offices,  titles  and  reporting  requirements),  authority,  duties or  responsibilities that are not (A) as a senior executive officer with the ultimate parent company of  the entity surviving or resulting from such Change of Control and (B) substantially similar to the                                         12    

 

Executive’s position (including status, offices, titles and reporting requirements), authority, duties  and  responsibilities  immediately  prior  to  the  Change  of  Control  (it  being  understood  that  for  purposes of the period beginning on the date of this Agreement until September 30, 2021, such  position shall be deemed to be Senior Vice President – HR & HS&E.         Notwithstanding anything herein to the contrary, the interim assignment of Executive’s   position, authority, duties, or responsibilities to any person while Executive is absent from his   duties during any of the one hundred twenty (120) business days set forth under the definition of   Disability shall not constitute a Good Reason for Executive to terminate his employment with the   Company.   In  addition,  the  Executive’s  termination of  employment  shall  not  constitute   Termination for Good Reason unless Executive notifies the Company of the condition or event   constituting  Good  Reason  within  ninety  (90)  days  of  the  condition’s  initial  existence  and  the   Company fails to cure the conditions, to the extent curable, specified in the notice within thirty   (30) days following such notification.  Further, the Executive’s termination of employment shall   not constitute Termination for Good Reason unless the Executive terminates his employment with   the Company within thirty (30) days following the end of the Company’s 30-day cure period.  Any   termination during the Term by the Executive for Good Reason shall be communicated by Notice   of Termination to the other party hereto given in accordance with this Agreement.          14.   IRS .  “IRS” shall mean the Internal Revenue Service.          15.   Notice of Termination .  “Notice of Termination” shall mean a written notice that   sets forth in reasonable detail the facts and circumstances for Termination for Good Reason.  Such   Notice of Termination shall be subject to the Company’s thirty (30) day cure period.          16.   Person .  “Person” shall mean any individual, entity or group (within the meaning   of Section 13(d)(3) or 14(d)(2) of the Exchange Act).          17.   Protected Period .  The “Protected Period” shall mean the period during the Term   beginning on the date of the Change of Control and ending on the three (3)-year anniversary of   such  Change  of  Control  or  Executive’s  death,  if  earlier.   Notwithstanding  the  foregoing,  the   Protected Period shall end on the last day of the Term.  In addition, notwithstanding anything   contained herein to the contrary, a Protected Period shall be deemed to exist during the period   beginning on the date of this Agreement and ending on September 30, 2021.          18.   Qualifying Termination .  A “Qualifying Termination” shall mean a Termination   occurring during the Protected Period that is the result of either (a) a unilateral and involuntary   Termination by the Company other than for Cause, when Executive remains willing and able to   continue providing services, or (b) resignation by Executive for Good Reason.  Termination of   Executive’s employment during the Protected Period for any other reason, including Executive’s   death or Disability, a Termination by the Company for Cause or a Termination by Executive other   than for Good Reason shall not constitute a Qualifying Termination.          19.   Section 409A Rules .  “Section 409A Rules” shall mean Section 409A of the Code   and the Treasury Regulations and administrative guidance promulgated thereunder.          20.   Target Annual Bonus .  “Target Annual Bonus” shall mean the target incentive   award opportunity for Executive as established with respect to any Annual Bonus.                                         13    

 

     21.   Term .  “Term” shall have the meaning set forth in Section 1 of this Agreement.        22.   Termination .  “Termination” shall mean the permanent cessation of the provision  of services for compensation by Executive to the Company and all affiliates and successors of the  foregoing in any capacity, including but not limited to that of an employee or an independent  contractor, where Executive and the Company reasonably anticipate that no further services will  be performed and which constitutes a “separation from service” within the meaning of the Section  409A Rules.                                         14                

 

                                     EXHIBIT A                                        TO                       CHANGE OF CONTROL AGREEMENT                                                                                                              AGREEMENT AND RELEASE      This  Agreement  and  Release  (“Release”)  is  entered  into  between  you,  the  undersigned  employee, and Independence Contract Drilling,  Inc. (the “Company”).  You have [__]  days to  consider this Release, which you agree is a reasonable amount of time.  While you may sign this  Release prior to the expiration of this [___] -day period, you are not to sign it prior to the date of   your termination of employment with the Company.               1.    Definitions .                a.    “Released  Parties”  means  the  Company  and  its  past, present  and  future   parents, subsidiaries, divisions, successors, predecessors, employee benefit plans and affiliated or   related companies, and also each of the foregoing entities’ past, present and future owners, officers,   directors,  stockholders,  investors,  partners,  managers,  principals,  members,  committees,   administrators,  sponsors,  executors,  trustees,  fiduciaries,  employees,  agents,  assigns,   representatives and attorneys, in their personal and representative capacities.  Each of the Released   Parties is an intended beneficiary of this Release.               b.    “Claims” means all theories of recovery of whatever nature, whether known  or unknown, recognized by the law or equity of any jurisdiction.  It includes but is not limited to  any and all actions, causes of action, lawsuits, claims, complaints, petitions, charges, demands,  liabilities, indebtedness, losses, damages, rights and judgments in which you have had or may have  an  interest.   It  also  includes  but  is  not  limited  to  any  claim  for  wages,  benefits  or  other  compensation.  It also includes but is not limited to claims asserted by you or on your behalf by  some other person, entity or government agency.         2.    Consideration .   The  Company  agrees  to  pay  you  the  consideration set  forth  in  section 3(a) or 3(b) of the Change of Control Agreement between you and the Company dated as  of [_________ ] (the “CIC Agreement”) .  The Company will make such payments to you at the  times set forth in the CIC Agreement.  You acknowledge that the payment that the Company will  make to you in consideration for this Release is in addition to anything else of value to which you  are entitled and that the Company is not otherwise obligated to make this payment to you.         3.    Release of Claims .               a.    You — on behalf of yourself and your heirs, executors, administrators, legal  representatives,  successors,  beneficiaries,  and  assigns  —  unconditionally  release  and  forever  discharge the Released Parties from, and waive, any and all Claims that you have or may have  against  any  of  the  Released  Parties  arising  from  your  employment  with  the  Company,  the  termination thereof, and any other acts or omissions occurring on or before the date you sign this  Release; provided, however , that this Agreement shall not operate to release any Claims that you  may have to payments or benefits under the terms of the CIC Agreement with respect to Accrued                                      Exhibit A-1    

 

   Obligations or any rights you may have to indemnification under any indemnification agreement  between you and the Company or any of its affiliates, or the bylaws or any directors and officers  liability insurance policy of the Company or any of its affiliates (collectively, the “Unreleased  Claims”).               b.    The release set forth in Paragraph 3(a) includes, but is not limited to, any   and  all  Claims  under  (i)  the  common  law  (tort,  contract  or  other)  of  any  jurisdiction;  (ii)  the   Rehabilitation Act of 1973, the Age Discrimination in Employment Act (as amended by the Older   Workers Benefit Protection Act), the Americans with Disabilities Act, Title VII of the Civil Rights   Act  of  1964,  and  any  other  federal,  state  and  local  statutes,  ordinances,  executive  orders  and   regulations  prohibiting  discrimination  or  retaliation  upon  the  basis  of  age,  race,  sex,  national   original, religion, disability, or other unlawful factor; (iii) the National Labor Relations Act; (iv)   the Employee Retirement Income Security Act; (v) the Family and Medical Leave Act; (vi) the   Fair Labor Standards Act; (vii) the Equal Pay Act; (viii) the Worker Adjustment and Retraining   Notification Act; and (ix) any other federal, state or local law.                c.    In furtherance of this Release, you promise not to bring any Claims (other   than Unreleased Claims) against any of the Released Parties in or  before any court or arbitral   authority.  You also agree effective as of the date of this release to resign any and all directorships   with the Company and any of its subsidiaries and affiliates.          4.    Confidentiality .  You agree that you will not reveal, or cause to be revealed, this   Release or its terms to any third party (other than your attorney, tax advisor, or spouse), except as   required by law.          5.    Acknowledgment .   You  acknowledge  that,  by  entering  into  this  Release,  the   Company does not admit to any wrongdoing in connection with your employment or termination,   and that this Release is intended as a compromise of any Claims you have or may have against the   Released  Parties.   You  further  acknowledge  that  you  have  carefully  read  this  Release  and   understand its final and binding effect, have had a reasonable amount of time to consider it, and   are entering this Release voluntarily.  You acknowledge that the Company has advised  you in   writing to seek the advice of legal counsel prior to executing this release, and that you have had   the opportunity to seek legal counsel of your choosing.  You acknowledge that you have had at   least twenty-one (21) days to consider this Release.          6.    Applicable Law .  This Release shall be construed and interpreted pursuant to the   laws of Texas without regard to its choice of law rules.          7.    Severability .  Each part, term, or provision of this Release is severable from the   others.  Notwithstanding any possible future finding by a duly constituted authority that a particular  part, term, or provision is invalid, void, or unenforceable, this Release has been made with the  clear intention that the validity and enforceability of the remaining parts, terms and provisions  shall  not  be  affected  thereby.  If  any  part,  term,  or  provision  is  so  found  invalid,  void  or  unenforceable,  the  applicability  of  any  such  part, term,  or  provision  shall  be  modified  to  the  minimum extent necessary to make it or its application valid and enforceable.                                       Exhibit A-2    

 

         8.    Effective Date:   You  acknowledge  that  you  have  seven  (7)  days  after  execution to revoke this Release, and that this Release shall not become final and binding until the  expiration of seven (7) days after execution.         IN WITNESS WHEREOF     , the parties have executed this Release on the date set forth  below.       EXECUTIVE:         ____________________________________      Date:  [_______________, 20___]  [Name]        COMPANY:        INDEPENDENCE CONTRACT DRILLING, INC.      Date:  [_______________, 20___]        By: _________________________________  Name: ______________________________  Title: _______________________________                                               Exhibit A-3changeofcontrolagreem059

                     CHANGE OF CONTROL AGREEMENT         THIS CHANGE OF CONTROL AGREEMENT           (the “Agreement ”), made and entered   into  effective  as  of  December  26,  2018  (the  “Effective  Date ”),  by  and  between  Independence  Contract  Drilling,  Inc.,  a  Delaware  corporation  (the  “Company ”),  and  Bruce  Humpheries   (“Executive ”).          WHEREAS   , the Company and Executive desire to enter into an agreement regarding their   respective rights and obligations in connection with a Change of Control during the Term of this   Agreement;          THEREFORE   , for good and valuable consideration, the receipt and sufficiency of which   are hereby acknowledged, the Company and Executive agree as follows:           1.    Term .  This Agreement shall begin on the Effective Date and shall end on the third   anniversary of the Effective Date (the “Term ”); provided, however , if neither party shall have  provided written notice of termination at least one (1) year prior to the scheduled expiration of the  then current term of this Agreement (each such date by which such notice must be provided, a  “Renewal Date ”), the Term shall automatically be extended for one (1) additional year so as to  expire two (2)  years from such Renewal Date.  Upon a Change of Control, the Term shall be  automatically extended to the third anniversary of the Change of Control.         2.    Qualifying Termination .  Subject to the terms of this Agreement, if a Qualifying  Termination  occurs  with  respect  to  the  Executive,  Executive  shall  be  entitled  to  the  benefits  provided in Section 3 hereof.  If Executive’s employment terminates for any reason other than for  a  Qualifying  Termination,  then  Executive  shall  not be  entitled  to  any  benefits  under  this  Agreement; provided  that Executive’s right to receive the Accrued Obligations, if any, shall not  be affected by this Agreement.         3.    Benefits Upon a Qualifying Termination .         (a)   Lump Sum  .  Subject to Section 3(c) and 3(d), if a Qualifying Termination occurs  with respect to the Executive, then in addition to the Accrued Obligations, for which no Release  of Claims is required, the Company shall pay to Executive, on the 60th day following the Date of  Qualifying Termination, an amount, in a single lump sum payment, equal to the sum of:         (i)   Any earned but unpaid Annual Bonus related to the fiscal year prior to the fiscal  year in which the Date of Termination occurs plus ;          (ii)  An amount equal to the product of (x) the Target Annual Bonus for the fiscal year  in which the Date of Termination occurs, and (y) a fraction, the numerator of which is the number  of  days  in  the  current  fiscal  year  that  have  elapsed  through  the  Date  of Termination,  and  the  denominator of which is 365 ; plus          (iii)  An amount equal to one times the sum of (x) the Executive’s Base Salary (at the  rate in effect as of the Date of Termination) and (y) the Target Annual Bonus for the fiscal year in  which the Date of Termination occurs.       

 

      (b)   Awards .  Subject to Section 3(c) and 3(d), if a Qualifying Termination occurs with   respect to the Executive, then (i) except as expressly prohibited as of the Effective Date by the   terms of the applicable plan under which any such award is granted, all outstanding awards and   benefits held by the Executive under the Company’s equity or long-term incentive compensation   plan, including all stock options and restricted stock held by the Executive, not already vested,   shall be 100% vested.          (c)   Release .  Notwithstanding anything in this Agreement to the contrary, no payment   other than payment of the Accrued Obligations shall be made or benefits provided pursuant to this   Agreement unless and until Executive signs and returns to the Company within fifty (50) days   following  the  date  of  a  Qualifying  Termination,  and  does  not  revoke  within  seven  (7)  days   thereafter, a release and waiver agreement (the “Release of Claims ”) in substantially the same   form as that attached hereto as Exhibit A, in exchange for the benefits described in this Section 3,  releasing  and  waiving  all  claims  for  liability  and damages  in  any  way  related  to  Executive’s  employment against the Company, its affiliates, their directors, officers, employees and agents,  and their employee benefit plans and fiduciaries and agents of such plans.         (d)   Section 409A Rules.         (i)   This  Agreement  is  intended  to  comply  with  the  Section  409A  Rules  and  any  ambiguous provisions will be construed in a manner that is compliant with or exempt from the  application  of  the  Section  409A  Rules.   If  a  provision  of  the Agreement  would  result  in  the  imposition of applicable taxes and interest under the Section 409A Rules, such provision may be  reformed to avoid, to the extent possible, imposition of such taxes and interest and no action taken  to comply with the Section 409A Rules shall be deemed to adversely affect any rights or benefits  of Executive hereunder.  For purposes of the Section 409A Rules, each payment or amount due  under this Agreement shall be considered a separate payment, and Executive’s entitlement to a  series of payments under this Agreement shall be treated as an entitlement to a series of separate  payments.         (ii)  To the extent that any reimbursement or benefit in kind hereunder needs to comply  with  the  Section  409A  Rules,  such  reimbursement  or benefit  in  kind  shall  be  administered  in  accordance with Treasury Regulation Section 1.409A-3(i)(1)(iv).  Specifically, (A) the applicable  reimbursements and benefits in kind shall be such reimbursements and benefits in kind allowable  pursuant to the Company’s standard policies and procedures as apply to the Company’s executive  employees  generally,  (B)  the  amounts  reimbursed  and  in-kind  benefits  under  this Agreement  during  Executive’s  taxable  year  may  not  affect  the amounts  reimbursed  or  in-kind  benefits  provided in any other taxable year, (C) the reimbursement of an eligible expense shall be made on  or before the last day of Executive’s taxable year following the taxable year in which the expense  was incurred, (D) the right to reimbursement or an in-kind benefit is not subject to liquidation or  exchange  for  another  benefit,  and  (E)  the  right  to reimbursement  of  expenses  incurred  or  to  provision of benefits in kind shall terminate no later than one (1) year from Executive’s Date of  Termination.         (iii)  If Executive is a “specified employee” within the meaning of the Section 409A  Rules  as  of  his  Date  of  Termination,  no  distributions  or  benefits  that  are  subject  to,  and  not  otherwise exempt from, the Section 409A Rules shall be made under this Agreement before the                                          2    

 

date that is six (6) months and two (2) days after the Date of Termination (or, if earlier, the date of  Executive’s death) and any such delayed distributions or benefits shall be made as of such date  without interest.         4.    Restrictions and Obligations of Executive .         (a)   Access to, and Acknowledgement of Value of, Confidential Information .  The  Company  has  previously  made  available  to  Executive Confidential  Information  regarding  the  Company  and  its  business  operations,  and  the  Company  agrees  to  provide  Executive  with  (i) Confidential Information regarding the Company and its business operations arising after the  date hereof and (ii) access to certain of the Company’s customers, prospective customers, vendors  and other parties with whom the Company conducts business, which will allow Executive the  opportunity  to  develop  business  relationships  and  goodwill  with  such  customers,  prospective  customers,  vendors  and  other  such  parties  after  the  date  hereof.   Executive  acknowledges  and  agrees that the Confidential Information is of significant value to the Company and the protection  against  unauthorized  disclosure  and  use  of  the  Confidential  Information  and  the  business  relationships and goodwill that may be developed by Executive in performing his/her duties on  behalf of the Company is of critical importance to the Company.  The Company and Executive  agree that in addition to the Company’s disclosure of the Confidential Information and the business  relationships and goodwill that may be developed by Executive in performing his duties on behalf  of the Company, the Company’s agreement to make the payments provided in this Agreement to  Executive  constitutes  additional  consideration  for the  Executive’s  compliance  with  the  undertakings set forth in this Section 4.  Notwithstanding any other provision of this Agreement to  the contrary, Executive  shall only be required to comply  with the provisions of this Section 4  following  the  Date  of Termination  if  Executive  receives  the  benefits  as  provided  in  Section  3  above.         (b)   Confidentiality .   Executive  acknowledges  that  the  Company  has  previously  provided Executive with Confidential Information and will continue to provide Executive with  Confidential  Information.   Executive  agrees  that  Executive  will  not,  while  employed  by  the  Company or any affiliate and at any time thereafter, disclose or make available to any other person  or entity, or use for Executive’s own personal gain, any Confidential Information, except for such  disclosures as required in the performance of Executive’s duties with the Company or  as may  otherwise be required by law or legal process (in which case Executive shall notify the Company  of such legal or judicial proceeding as soon as practicable following his receipt of notice of such a  proceeding, and permit the Company to seek to protect its interests and information).  Executive  acknowledges  and  agrees  that  such  Confidential  Information  is  the  exclusive  property  of  the  Company and will only be used for the benefit of the Company.  Further, Executive waives and  releases any claim that he/she should be able to use, for the benefit of any competing person or  entity, Confidential Information that was received by Executive while working for the Company.         Nothing  contained  in  this  Section  4  shall  prohibit or  otherwise  restrict  Executive  from  acquiring  or  owning,  directly  or  indirectly,  for  passive  investment  purposes  not  intended  to  circumvent this Agreement, securities of any entity engaged, directly or indirectly, in a Restricted  Business if such entity is a public entity and Executive (i) is not a controlling Person of, or a  member of a group that controls, such entity and (ii) owns, directly or indirectly, no more than 3%  of any class of equity securities of such entity.                                          3    

 

      (c)   Injunctive Relief .  Executive acknowledges that monetary damages for any breach   of Section 4(b) above will not be an adequate remedy and that irreparable injury will result to the   Company, its business and property, in the event of such a breach.  For that reason, Executive   agrees  that  in  the  event  of  a  breach,  in  addition  to  recovering  legal  damages,  the  Company  is   entitled to proceed in equity for specific performance or to enjoin Executive from violating such   provisions.          (d)   Severability .   The  Executive  acknowledges  and  agrees  that  the  restrictive  covenants set forth in this Section 4 are reasonable and necessary in order to protect the Company’s  valid business interests.  It is the intention of the parties hereto that the covenants, provisions and  agreements  contained  herein  shall  be  enforceable  to  the  fullest  extent  allowed  by  law.   If  any  covenant, provision or agreement contained herein is found by a court having jurisdiction to be  unreasonable in duration, scope or character of restrictions, or otherwise to be unenforceable, such  covenant,  provision  or  agreement  shall  not  be  rendered  unenforceable  thereby,  but  rather  the  duration,  scope  or  character  of  restrictions  of  such  covenant,  provision  or  agreement  shall  be  deemed  reduced  or  modified  with  retroactive  effect to  render  such  covenant,  provision  or  agreement reasonable or otherwise enforceable (as the case may be), and such covenant, provision  or agreement shall be enforced as modified.  If the court having jurisdiction will not review the  covenant, provision or agreement, the parties hereto shall mutually agree to a revision having an  effect as close as permitted by applicable law to the provision declared unenforceable.  The parties  hereto agree that if a court having jurisdiction determines, despite the express intent of the parties  hereto,  that  any  portion  of  the  covenants,  provisions  or  agreements  contained  herein  are  not  enforceable, the remaining covenants, provisions or agreements of this Section 4 shall be valid and  enforceable.  Moreover, to the extent that any provision is declared unenforceable, the Company  shall have any and all rights under applicable statutes or common law to enforce its rights with  respect to any and all Confidential Information or unfair competition by the Executive.         5.    Parachute Payment Limitation .          (a)   Anything in this Agreement to the contrary notwithstanding, if the Executive is a  “disqualified individual” (as defined in Section 280G of the Code), and the severance benefits  provided  in  Section  3,  together  with  any  other  payments  which  the  Executive  has  the  right  to  receive, would constitute a “parachute payment” (as defined in Section 280G of the Code), the  severance  benefits  provided  hereunder  that  constitute  a  parachute  payment  shall  be  either  (i) reduced (but not below zero) so that the aggregate present value of such payments received by  the Executive from the Company will be one dollar ($1.00) less than three times the Executive’s  “base amount” (as defined in Section 280G of the Code) and so that no portion of such payments  received by the Executive shall be subject to the excise tax imposed by Section 4999 of the Code,  or (ii) paid in full, whichever produces the better net after-tax result for the Executive (taking into  account any applicable excise tax under Section 4999 of the Code and any other applicable taxes).          (b)   In  making  any  reductions  pursuant  to  Section  5(a), above,  the  Company  shall  reduce or eliminate amounts first by reducing those amounts that are not payable in cash, and then  by reducing or eliminating cash amounts, in each case in reverse order beginning with amounts, if  any, that are to be paid the farthest in time from the Date of Qualifying Termination; provided ,  however , that no amount that is subject to the Section 409A Rules shall be reduced or eliminated  until all amounts that are not subject to the Section 409A Rules have been eliminated, and then all                                          4    

 

such amounts that are subject to the Section 409A Rules shall not be reduced in reverse order but  shall be reduced proportionally.  The determination of the base amount, the present value of the  parachute  payments,  and  the  amount  of  any  benefit  to  be  reduced  shall  be  determined  by  the  Company’s independent auditors, or such other nationally recognized accounting firm mutually  acceptable to the Company and Executive, in accordance with the principles of Section 280G of  the  Code  and  based  upon  the  advice  of  any  tax  counsel  selected  by  such  auditors  or  other  accounting firm.  If a reduced payment is made and through error or otherwise that payment, when  aggregated  with  other  payments  from  the  Company  (or  its  affiliates)  used  in  determining  if  a  “parachute payment” exists, exceeds one dollar ($1.00) less than three times the Executive’s base  amount, the Executive shall immediately repay such excess to the Company upon notification that  an overpayment has been made.         6.    Miscellaneous Provisions .         (a)   Definitions Incorporated by Reference .  Reference is made to Annex I hereto for  definitions  of  certain  capitalized  terms  used  in  this  Agreement,  and  such  definitions  are  incorporated herein by such reference with the same effect as if set forth herein.         (b)   Cooperation .  If Executive becomes entitled to benefits under Section 3 of this  Agreement,  Executive  agrees,  for  a  one  (1)  year  period  following  the  Date  of Termination,  to  provide reasonable cooperation to the Company in response to reasonable requests made by the  Company for information or assistance, including but not limited to, participating upon reasonable  notice in conferences and meetings, providing documents or information, aiding in the analysis of  documents, or complying with any other reasonable requests by the Company including execution  of  any  agreements  that  are  reasonably  necessary, provided   such  cooperation  relates  to  matters   concerning Executive’s duties with the Company and the requests do not, in the good faith opinion   of Executive, materially interfere with Executive’s other activities.          (c)  Successors; Binding Agreement .          (i)   Except in the case of a merger involving the Company with respect to which under  applicable law the surviving corporation of such merger will be obligated under this Agreement in  the same manner and to the same extent as the Company would have been required if no such  merger had taken place, the Company will require any successor, by purchase or otherwise, to all  or substantially all of the business and/or assets of the Company, to execute an agreement whereby  such successor expressly assumes and agrees to perform this Agreement in the same manner and  to the same extent as the Company would have been required if no such succession had taken place  and expressly agrees that Executive may enforce this Agreement against such successor.  As used  in this Agreement, “Company” shall mean the Company as hereinbefore defined and any successor  to its business and/or assets as aforesaid that executes and delivers the agreement provided for in  this Section 6(c)(i) or which otherwise becomes  bound by  all the terms and provisions of this  Agreement by operation of law.         (ii)  This Agreement  shall  inure  to  the  benefit  of  and  be  enforceable  by  Executive’s  personal  or  legal  representatives,  executors,  administrators,  successors,  heirs,  distributees,  devisees and legatees.  If Executive should die prior to payment of any amount that is otherwise                                           5    

 

payable under this Agreement, any such amount shall be paid in accordance with the terms of this  Agreement to Executive’s estate.         (d)   Notice .  All notices, consents, waivers, and other communications required under  this Agreement must be in writing and will be deemed to have been duly given when (i) delivered  by hand (with written confirmation of receipt), (ii) sent by facsimile (with confirmation of receipt),  provided  that a copy is mailed by certified mail, return receipt requested, or (iii) when received by  the addressee, if sent by a nationally recognized overnight delivery service, in each case to the  appropriate  addresses  and  facsimile  numbers  set  forth  below  (or  to  such  other  addresses  and  facsimile numbers as a party may designate by notice to the other parties):         If to the Company:          Independence Contract Drilling, Inc.        20475 Hwy 249, Suite 300        Houston, Texas  77070        Attn: Chief Executive Officer         If to Executive:         At Executive’s then current address shown in the Company’s records         (e)   Miscellaneous .   No  provisions  of  this Agreement  may  be  modified,  waived  or  discharged  unless  such  waiver,  modification  or  discharge  is  agreed  to  in  writing  signed  by  Executive and by an officer of the Company authorized by the Board.  No waiver by either party  hereto at any time of any breach by the other party hereto of, or compliance with, any condition or  provision of this Agreement to be performed by such other party shall be deemed a waiver of  similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.         (f)   Validity .  The interpretation, construction and performance of this Agreement shall  be governed by and construed and enforced in accordance with the laws of the State of Texas  without regard to conflicts of laws principles.  The invalidity or unenforceability of any provisions  of  this Agreement  shall  not  affect  the  validity  or enforceability  of  any  other  provision  of  this  Agreement, each of which shall remain in full force and effect.         (g)   Counterparts .  This Agreement may be executed in one or more counterparts, each  of which shall be deemed to be an original but all of which together shall constitute one and the  same instrument.         (h)   Descriptive Headings .  Descriptive headings are for convenience only and shall  not control or affect the meaning or construction of any provision of this Agreement.         (i)   Corporate Approval .   This Agreement  has  been  approved  by  the  Board,  or  a  committee thereof, and has been duly executed and delivered by Executive and on behalf of the  Company by its duly authorized representative.         (j)   Disputes .  The parties agree to resolve any claim or controversy arising out of or  relating  to  this Agreement  by  binding  arbitration  under  the  Federal Arbitration Act  before  one                                          6    

 

arbitrator  in  the  City  of  Houston,  State  of  Texas, administered  by  the  American  Arbitration  Association under its Commercial Arbitration Rules, and judgment on the award rendered by the  arbitrator may be entered in any court having jurisdiction thereof.  The Company shall reimburse  Executive, on a current basis, for all legal fees and expenses incurred by Executive in connection  with any dispute arising under this Agreement, including, without limitation, the fees and expenses  of the arbitrator, unless the arbitrator finds Executive brought such claim in bad faith, in which  event each party shall pay its own costs and expenses and Executive shall repay to the Company  any fees and expenses previously paid on Executive’s behalf by the Company.         The parties stipulate that the provisions hereof shall be a complete defense to any suit,  action, or proceeding instituted in any federal, state, or local court or before any administrative  tribunal with respect to any controversy or dispute arising during the period of this Agreement and  which is arbitrable as herein set forth.  The arbitration provisions hereof shall, with respect to such   controversy or dispute, survive the termination of this Agreement.         (k)   Withholding of Taxes .  The Company may withhold from any amounts payable  under  this Agreement  or  otherwise  in  connection  with  your  employment  all  taxes  and  other  amounts it is required to withhold pursuant to any applicable law or regulation or otherwise.         (l)   No Guarantee of Tax Consequences .  The Company makes no commitment or  guarantee to Executive or any other person that any federal, state, local or other tax treatment will  (or will not) apply or be available to any person eligible for benefits under this Agreement and  assumes  no  liability  whatsoever  for  the  tax  consequences  to  Executive  or  to  any  other  person  eligible for benefits under this Agreement.         (m)   Clawback Provisions .  Notwithstanding any other provisions in this 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 any such law, government regulation or stock exchange listing  requirement).         (n)   No Employment Agreement .  Nothing in this Agreement shall give Executive any  rights to continued employment by or other service with the Company or any of its affiliates or  any  successors,  nor  shall  it  restrict  in  any  way  the  rights  of  the  Company,  or  your  rights,  to  terminate  Executive’s  employment  or  other  service  relationship  with  the  Company  and  its  affiliates.         (o)   Entire Agreement .  This instrument contains the entire agreement of Executive  and  the  Company  with  respect  to  the  subject  matter hereof,  and  hereby  expressly  terminates,  rescinds  and  replaces  in  full  any  prior  and  contemporaneous  promises,  representations,  understandings, arrangements and agreements between the parties relating to the subject matter  hereof, whether written or oral.  However, nothing in this Agreement shall affect Executive’s rights  under such compensation and benefit plans and programs of the Company in which Executive may  participate, except as may be explicitly provided in this Agreement.                                          7    

 

         IN WITNESS WHEREOF, the Company and Executive have executed this Agreement in  one or more counterparts effective for all purposes as of the Effective Date.                                    INDEPENDENCE CONTRACT DRILLING, INC.                                                                                                         By:    /s/ Anthony Gallegos                                   Name:  J. Anthony Gallegos                                   Title:   President & Chief Executive Officer                                                                                                         EXECUTIVE                                                                                                            /s/ Bruce Humpheries                                   Bruce Humpheries                                                                      8    

 

                                   ANNEX I                                        TO                       CHANGE OF CONTROL AGREEMENT     Definitions:         1.    Accrued Obligations .  “Accrued Obligations” shall mean the aggregate amount of  (i) any earned but unpaid Base Salary; (ii) accrued but unpaid vacation pay through the Date of  Termination; (iii) any unreimbursed reasonable business expenses incurred by Executive prior to  the Date of Termination that are reimbursable in accordance with the policies and procedures of  the Company; and (iv) such employee benefits, if any, as to which Executive may be entitled  pursuant  to  the  terms  governing  such  benefits,  payable  in  accordance  with  the  terms  of  the  applicable plan or other arrangement governing such benefits.         2.    Annual  Bonus .   “Annual  Bonus”  shall  mean  (i)  any  annual  incentive  award(s)  payable  to  Executive  pursuant  to  the  Company’s  2012  Omnibus  Incentive  Plan,  as  may  be  amended and restated from time to time, or any successor plan as adopted by the Company; and  (ii) any other annual cash incentive or bonus award(s) granted by the Company to the Executive.         3.    Base Salary .  “Base Salary” shall mean an Executive’s highest annual rate of base  salary in effect at any time during the period beginning six (6) months preceding the Change of  Control  and  throughout  the  Protected  Period,  without  reduction  by  payroll  deductions  and  withholdings, including but not limited to, elective contributions made on the Executive’s behalf  pursuant to a plan maintained under Code Sections 125 or 401, and any other reductions of the  Executive’s remuneration, but excluding bonuses, severance pay and other amounts in lieu of base  salary and any other amounts not considered base salary under the Company’s normal payroll  practices.         4.    Board .  “Board” shall mean the Board of Directors of the Company.         5.    Cause .  “Cause” shall mean the following:          (i)   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;           (ii)  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   amounting to gross negligence or willful misconduct;           (iii)  misappropriation of funds or property of the Company or committing any fraud   against  the  Company  or  its  affiliates  or  against  any  other  person  or  entity  in  the  course  of   employment with the Company or its affiliates;           (iv)  misappropriation  of  any  corporate  opportunity,  or  otherwise  obtaining  personal   profit from any transaction which is adverse to the interests of the Company or its affiliates or to   the benefits of which the Company or its affiliates are entitled;                                           9    

 

      (v)   conviction of a crime involving moral turpitude or of a felony;          (vi)   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; or          (vii)  chronic substance abuse, including abuse of alcohol, drugs or other substances or  use of illegal narcotics or substances, for which Executive 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 Executive’s duties and responsibilities.         For purposes of this definition, no act, or failure to act, by Executive will be considered  “willful” if done, or omitted to be done, by Executive 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.   Any termination during the Term by the Company for Cause shall be communicated by Notice of  Termination to the other party hereto given in accordance with this Agreement.          6.    Change of Control .  A “Change of Control” shall mean:           (i)   The acquisition by any 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  (i),  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 (iii) of this definition ;           (ii)  Individuals,  who,  as  of  the  date  hereof  (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, 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;          (iii)  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                                         10    

 

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 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          (iv)  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 the Section 409A Rules 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 the  Section 409A Rules, a transaction or circumstance that satisfies the requirements of both (1) a  Change of Control under the applicable clauses (i) through (iv) above, as applicable, and (2) a  “change in control event” within the meaning of Treasury Regulation Section 1.409A-3(i)(5).         7.    Code .  “Code” shall mean the Internal Revenue Code of 1986, as amended, and the  regulations and administrative guidance promulgated thereunder.         8.    Confidential  Information .   “Confidential  Information”  means  and  includes  all  confidential and/or proprietary information, trade secrets and “know-how” and compilations of  information of any kind, type or nature (tangible and intangible, written or oral, and including  information contained, stored or transmitted through any electronic medium), whether owned by  the Company or its affiliated companies, disclosed to the Company or its affiliated companies in  confidence  by  third  parties  or  licensed  from  any  third  parties,  which,  at  any  time  during  Executive’s  employment  by  the  Company,  is  developed,  designed  or  discovered  or  otherwise  acquired or learned by Executive and which relates to the Company or its affiliated companies,  partners, business, services, products, processes, properties or assets, customers, clients, suppliers,  vendors or markets or such third parties.  Notwithstanding the foregoing, Confidential Information  shall not include any information that becomes generally available to the public other than as a  result of any disclosure or act of Executive in violation of the terms of this Agreement.                                         11    

 

      9.    Date of Qualifying Termination .  “Date of Qualifying Termination” shall mean,  assuming a Qualifying Termination occurs, the date of such Termination.         10.   Date  of  Termination .   “Date  of  Termination”  shall  mean  the  date  Executive  experiences a Termination.         11.   Disability .  “Disability” means Executive will be deemed “Disabled,” if Executive   shall have been unable to substantially perform Executive’s duties as an executive of the Company   or  any  subsidiary  thereof  as  a  result  of  sickness  or  injury,  with  or  without  reasonable   accommodation, and shall have remained unable to perform any such duties for a period of more   than one hundred twenty (120) days in any twelve (12) month period.  If the Company determines   that Executive has become Disabled, the Company shall notify Executive of its determination.    Executive may then request an accommodation from the Company to assist in his/her return to   work.  The Company will determine whether Executive’s request can be accommodated without   undue hardship no later than thirty (30) days after Executive requests an accommodation.  In the   event Executive’s request cannot be accommodated, the Company may, by notice given in the   manner  provided  in  this  Agreement,  terminate  the  status  of  Executive  as  an  executive  and   employee of the Company.  Any such termination shall become effective thirty (30) days after   such notice of termination is given, unless within such thirty (30) day period, Executive becomes   capable of rendering services of the character contemplated hereby (and a physician chosen by the   Company so certifies in writing) and Executive in fact resumes such services.          12.   Exchange Act .  “Exchange Act” shall mean the Securities Exchange Act of 1934,   as amended.          13.   Good Reason .  “Good Reason” shall mean the occurrence of any of the following   without Executive’s express written consent:          (a)   any action or inaction that constitutes a material breach by the Company of this   Agreement and such action or inaction continues uncured after thirty (30) days following written   notice from the Executive;          (b)   the assignment to the Executive of any duties that are a diminution in any respect  from  the  Executive’s  position  (including  status,  offices,  titles  and  reporting  requirements),  authority,  duties  or  responsibilities  with  respect to  the  Company,  or  any  other  action  by  the  Company  which  results  in  a  diminution  in  such  position,  authority,  duties  or  responsibilities,  excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith  and which is remedied by the Company within thirty (30) days of receipt of written notice thereof  given by the Executive.         (c)   a change in the  geographic location  at which Executive must normally  perform  services to a location more than fifty (50) miles from Houston, Texas or the location at which  Executive normally performs such services as of the Effective Date; or         (d)   in the event a Change of Control has occurred, the assignment to the Executive to  any  position  (including  status,  offices,  titles  and  reporting  requirements),  authority,  duties or  responsibilities that are not (A) as a senior executive officer with the ultimate parent company of  the entity surviving or resulting from such Change of Control and (B) substantially similar to the                                         12    

 

Executive’s position (including status, offices, titles and reporting requirements), authority, duties  and  responsibilities  immediately  prior  to  the  Change  of  Control  (it  being  understood  that  for  purposes of the period beginning on the date of this Agreement until September 30, 2021, such  position shall be deemed to be Senior Vice President Operations - West.         Notwithstanding anything herein to the contrary, the interim assignment of Executive’s   position, authority, duties, or responsibilities to any person while Executive is absent from his   duties during any of the one hundred twenty (120) business days set forth under the definition of   Disability shall not constitute a Good Reason for Executive to terminate his employment with the   Company.   In  addition,  the  Executive’s  termination of  employment  shall  not  constitute   Termination for Good Reason unless Executive notifies the Company of the condition or event   constituting  Good  Reason  within  ninety  (90)  days  of  the  condition’s  initial  existence  and  the   Company fails to cure the conditions, to the extent curable, specified in the notice within thirty   (30) days following such notification.  Further, the Executive’s termination of employment shall   not constitute Termination for Good Reason unless the Executive terminates his employment with   the Company within thirty (30) days following the end of the Company’s 30-day cure period.  Any   termination during the Term by the Executive for Good Reason shall be communicated by Notice   of Termination to the other party hereto given in accordance with this Agreement.          14.   IRS .  “IRS” shall mean the Internal Revenue Service.          15.   Notice of Termination .  “Notice of Termination” shall mean a written notice that   sets forth in reasonable detail the facts and circumstances for Termination for Good Reason.  Such   Notice of Termination shall be subject to the Company’s thirty (30) day cure period.          16.   Person .  “Person” shall mean any individual, entity or group (within the meaning   of Section 13(d)(3) or 14(d)(2) of the Exchange Act).          17.   Protected Period .  The “Protected Period” shall mean the period during the Term   beginning on the date of the Change of Control and ending on the three (3)-year anniversary of   such  Change  of  Control  or  Executive’s  death,  if  earlier.   Notwithstanding  the  foregoing,  the   Protected Period shall end on the last day of the Term.  In addition, notwithstanding anything   contained herein to the contrary, a Protected Period shall be deemed to exist during the period   beginning on the date of this Agreement and ending on September 30, 2021.          18.   Qualifying Termination .  A “Qualifying Termination” shall mean a Termination   occurring during the Protected Period that is the result of either (a) a unilateral and involuntary   Termination by the Company other than for Cause, when Executive remains willing and able to   continue providing services, or (b) resignation by Executive for Good Reason.  Termination of   Executive’s employment during the Protected Period for any other reason, including Executive’s   death or Disability, a Termination by the Company for Cause or a Termination by Executive other   than for Good Reason shall not constitute a Qualifying Termination.          19.   Section 409A Rules .  “Section 409A Rules” shall mean Section 409A of the Code   and the Treasury Regulations and administrative guidance promulgated thereunder.          20.   Target Annual Bonus .  “Target Annual Bonus” shall mean the target incentive   award opportunity for Executive as established with respect to any Annual Bonus.                                         13    

 

     21.   Term .  “Term” shall have the meaning set forth in Section 1 of this Agreement.        22.   Termination .  “Termination” shall mean the permanent cessation of the provision  of services for compensation by Executive to the Company and all affiliates and successors of the  foregoing in any capacity, including but not limited to that of an employee or an independent  contractor, where Executive and the Company reasonably anticipate that no further services will  be performed and which constitutes a “separation from service” within the meaning of the Section  409A Rules.                                         14                

 

                                     EXHIBIT A                                        TO                       CHANGE OF CONTROL AGREEMENT                                                                                                              AGREEMENT AND RELEASE      This  Agreement  and  Release  (“Release”)  is  entered  into  between  you,  the  undersigned  employee, and Independence Contract Drilling,  Inc. (the “Company”).  You have [__]  days to  consider this Release, which you agree is a reasonable amount of time.  While you may sign this  Release prior to the expiration of this [___] -day period, you are not to sign it prior to the date of   your termination of employment with the Company.               1.    Definitions .                a.    “Released  Parties”  means  the  Company  and  its  past, present  and  future   parents, subsidiaries, divisions, successors, predecessors, employee benefit plans and affiliated or   related companies, and also each of the foregoing entities’ past, present and future owners, officers,   directors,  stockholders,  investors,  partners,  managers,  principals,  members,  committees,   administrators,  sponsors,  executors,  trustees,  fiduciaries,  employees,  agents,  assigns,   representatives and attorneys, in their personal and representative capacities.  Each of the Released   Parties is an intended beneficiary of this Release.               b.    “Claims” means all theories of recovery of whatever nature, whether known  or unknown, recognized by the law or equity of any jurisdiction.  It includes but is not limited to  any and all actions, causes of action, lawsuits, claims, complaints, petitions, charges, demands,  liabilities, indebtedness, losses, damages, rights and judgments in which you have had or may have  an  interest.   It  also  includes  but  is  not  limited  to  any  claim  for  wages,  benefits  or  other  compensation.  It also includes but is not limited to claims asserted by you or on your behalf by  some other person, entity or government agency.         2.    Consideration .   The  Company  agrees  to  pay  you  the  consideration set  forth  in  section 3(a) or 3(b) of the Change of Control Agreement between you and the Company dated as  of [_________ ] (the “CIC Agreement”) .  The Company will make such payments to you at the  times set forth in the CIC Agreement.  You acknowledge that the payment that the Company will  make to you in consideration for this Release is in addition to anything else of value to which you  are entitled and that the Company is not otherwise obligated to make this payment to you.         3.    Release of Claims .               a.    You — on behalf of yourself and your heirs, executors, administrators, legal  representatives,  successors,  beneficiaries,  and  assigns  —  unconditionally  release  and  forever  discharge the Released Parties from, and waive, any and all Claims that you have or may have  against  any  of  the  Released  Parties  arising  from  your  employment  with  the  Company,  the  termination thereof, and any other acts or omissions occurring on or before the date you sign this  Release; provided, however , that this Agreement shall not operate to release any Claims that you  may have to payments or benefits under the terms of the CIC Agreement with respect to Accrued                                      Exhibit A-1    

 

   Obligations or any rights you may have to indemnification under any indemnification agreement  between you and the Company or any of its affiliates, or the bylaws or any directors and officers  liability insurance policy of the Company or any of its affiliates (collectively, the “Unreleased  Claims”).               b.    The release set forth in Paragraph 3(a) includes, but is not limited to, any   and  all  Claims  under  (i)  the  common  law  (tort,  contract  or  other)  of  any  jurisdiction;  (ii)  the   Rehabilitation Act of 1973, the Age Discrimination in Employment Act (as amended by the Older   Workers Benefit Protection Act), the Americans with Disabilities Act, Title VII of the Civil Rights   Act  of  1964,  and  any  other  federal,  state  and  local  statutes,  ordinances,  executive  orders  and   regulations  prohibiting  discrimination  or  retaliation  upon  the  basis  of  age,  race,  sex,  national   original, religion, disability, or other unlawful factor; (iii) the National Labor Relations Act; (iv)   the Employee Retirement Income Security Act; (v) the Family and Medical Leave Act; (vi) the   Fair Labor Standards Act; (vii) the Equal Pay Act; (viii) the Worker Adjustment and Retraining   Notification Act; and (ix) any other federal, state or local law.                c.    In furtherance of this Release, you promise not to bring any Claims (other   than Unreleased Claims) against any of the Released Parties in or  before any court or arbitral   authority.  You also agree effective as of the date of this release to resign any and all directorships   with the Company and any of its subsidiaries and affiliates.          4.    Confidentiality .  You agree that you will not reveal, or cause to be revealed, this   Release or its terms to any third party (other than your attorney, tax advisor, or spouse), except as   required by law.          5.    Acknowledgment .   You  acknowledge  that,  by  entering  into  this  Release,  the   Company does not admit to any wrongdoing in connection with your employment or termination,   and that this Release is intended as a compromise of any Claims you have or may have against the   Released  Parties.   You  further  acknowledge  that  you  have  carefully  read  this  Release  and   understand its final and binding effect, have had a reasonable amount of time to consider it, and   are entering this Release voluntarily.  You acknowledge that the Company has advised  you in   writing to seek the advice of legal counsel prior to executing this release, and that you have had   the opportunity to seek legal counsel of your choosing.  You acknowledge that you have had at   least twenty-one (21) days to consider this Release.          6.    Applicable Law .  This Release shall be construed and interpreted pursuant to the   laws of Texas without regard to its choice of law rules.          7.    Severability .  Each part, term, or provision of this Release is severable from the   others.  Notwithstanding any possible future finding by a duly constituted authority that a particular  part, term, or provision is invalid, void, or unenforceable, this Release has been made with the  clear intention that the validity and enforceability of the remaining parts, terms and provisions  shall  not  be  affected  thereby.  If  any  part,  term,  or  provision  is  so  found  invalid,  void  or  unenforceable,  the  applicability  of  any  such  part, term,  or  provision  shall  be  modified  to  the  minimum extent necessary to make it or its application valid and enforceable.                                       Exhibit A-2    

 

         8.    Effective Date:   You  acknowledge  that  you  have  seven  (7)  days  after  execution to revoke this Release, and that this Release shall not become final and binding until the  expiration of seven (7) days after execution.         IN WITNESS WHEREOF     , the parties have executed this Release on the date set forth  below.       EXECUTIVE:         ____________________________________      Date:  [_______________, 20___]  [Name]        COMPANY:        INDEPENDENCE CONTRACT DRILLING, INC.      Date:  [_______________, 20___]        By: _________________________________  Name: ______________________________  Title: _______________________________                                               Exhibit A-3

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