SCHEDULE 14A
(RULE14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant ☒ Filed by a Party other than the Registrant ☐
Check the appropriate box:
Preliminary Proxy Statement | ||
Confidential, | ||
Definitive Proxy Statement | ||
Definitive Additional Materials | ||
Soliciting Material |
Independence Contract Drilling, Inc.
(Name of Registrant as Specified Inin Its Charter)
(Name of Person(s) Filing Proxy Statement, if other thanOther Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
☒ | No fee required. | |||
☐ | Fee computed on table below per Exchange Act Rules14a-6(i)(1) and0-11. | |||
1. | Title of each class of securities to which transaction applies: | |||
Aggregate number of securities to which transaction applies: | ||||
Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): | ||||
Proposed maximum aggregate value of transaction: | ||||
Total fee paid: | ||||
☐ | Fee paid previously with preliminary | |||
☐ | Check box if any part of the fee is offset as provided by Exchange ActRule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the | |||
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NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To Be Held On February 6, 2020
TO OUR STOCKHOLDERS:
A Special Meeting of Stockholders of Independence Contract Drilling, Inc. (the “Annual Meeting”“Company”) will be held at ourthe Company’s principal executive offices, located at 20475 State Highway 249, First Floor Auditorium, Houston, TX 77070, on Tuesday, June 4, 2019,February 6, 2020 at 8:00 a.m., Central Time.
1. | ||||
To approve an amendment to the Company’s Amended and Restated Certificate of Incorporation to effect aone-time reverse stock split (the “Reverse Split Amendment”) of common stock at a ratio of 1share-for-10 shares up to a ratio of 1share-for-20 shares, which ratio will be selected by the Company’s Board of Directors and set forth in a public announcement, together with a reduction in the authorized number of shares of the |
2. | |
The adjournment or postponement of the | |
Only Stockholdersstockholders of record at the close of business on April 15,December 16, 2019, the record date fixed by the Company’s board of directors, are entitled to notice of and to vote at the Annual Meeting. A listspecial meeting and any adjournment thereof.
IF YOU PLAN TO ATTEND: Please bring valid picture identification, such as a driver’s license or passport. Stockholders holding stock in brokerage accounts (“street name” holders) will also need to bring a copy of Stockholders will be available commencing ten days prior to the datea brokerage statement reflecting their stock ownership as of the Annual Meetingrecord date. Cameras, cell phones, recording devices and mayother electronic devices will not be inspected at our principal executive offices during normal business hours. The list of Stockholders also will be available for reviewpermitted at the Annual Meeting. If there are not sufficient votes for a quorum or to approve the items of business at the time of the Annual Meeting, the Annual Meeting may be adjourned in order to permit further solicitation of proxies.
Sincerely,
Philip A. Choyce
Corporate Secretary
Houston, Texas
, 2019
THE BOARD OF CONTENTSDIRECTORS WELCOMES STOCKHOLDERS WHO WISH TO ATTEND THE MEETING. WHETHER OR NOT YOU PLAN TO ATTEND, YOU ARE URGED TO COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE. A PROMPT RESPONSE WILL GREATLY FACILITATE ARRANGEMENTS FOR THE MEETING AND YOUR COOPERATION WILL BE APPRECIATED. STOCKHOLDERS WHO ATTEND THE MEETING MAY VOTE THEIR STOCK PERSONALLY EVEN THOUGH THEY HAVE SENT IN THEIR PROXIES.
INDEPENDENCE CONTRACT DRILLING, INC.
20475 State Highway 249, Suite 300
Houston, TX 77070
PROXY STATEMENT
, 2019
This Proxy Statement contains information related to the Independence Contract Drilling, Inc. 2019 Annual Meeting of Stockholders (the “Annual Meeting”). In this Proxy Statement, we refer to the Board of Directors of Independence Contract Drilling, Inc. as the “Board” and to Independence Contract Drilling, Inc. as the “Company,” “we,” “us,” and like terms.
Only stockholders of record at the close of business on the Record DateDecember 16, 2019 will be entitled to notice of and to vote at the AnnualSpecial Meeting. As of November 26, 2019, 76,319,474 shares of common stock, par value $0.01 per share, of the Company (“Common Stock”) were outstanding. Stockholders are entitled to cast one vote for each share held of record at the close of business on December 16, 2019 on each matter submitted to a vote at the Special Meeting. Any stockholder may revoke a proxy at any time prior to its exercise by filing a later-dated proxy or a written notice of revocation with the Secretary of the Company, or by voting in person at the Special Meeting. If a stockholder is not attending the Special Meeting, any proxy or notice should be returned in time for receipt no later than the close of business on the Record Date,day preceding the Special Meeting.
The representation in person or by proxy of at least a majority of the outstanding shares of our common stock entitled to vote at the Special Meeting is necessary to establish a quorum for the transaction of business. Abstentions and brokernon-votes are counted as present or represented for purposes of determining the presence or absence of a quorum. A“non-vote” occurs when a broker holding shares for a beneficial owner does not vote on a proposal because the broker does not have discretionary voting power and has not received instructions from the beneficial owner. On the Reverse Split Proposal (as defined below) and the adjournment of the Special Meeting proposal, an affirmative vote of at least a majority of the shares present, in person or represented by proxy, and voting on that matter is required for approval. An automated system administered by the Company’s transfer agent tabulates the votes. The vote on each matter submitted to stockholders is tabulated separately. Abstentions are included in the number of shares present or represented and voting on each matter and therefore, with respect to votes on specific proposals, will have the effect of negative votes. Broker“non-votes” are not so included.
At the Special Meeting, the Reverse Split Proposal will be subject to a vote of stockholders.
The stockholders will also consider and vote upon a possible adjournment or postponement of the Special Meeting, if necessary, to solicit additional proxies in the event that there are not sufficient votes at the time of the Special Meeting of stockholders to approve the Reverse Split Proposal. Where a choice has been specified on the proxy with respect to the foregoing proposals, the shares represented by the proxy will be voted in accordance with the specifications. If no specification is indicated on the proxy card, the shares represented by the proxy will
be voted (1) FORapproval of the Reverse Split Proposal and (2) FORthe adjournment or postponement of the Special Meeting, if necessary, to solicit additional proxies in the event that there are not sufficient votes at the time of the Special Meeting.
The Board knows of no other matters to be presented at the Special Meeting. If any other matter should be presented at the Special Meeting upon which a vote properly may be taken, shares represented by all proxies received by the Board will be voted with respect thereto in accordance with the judgment of J. Anthony Gallegos, Jr. and Philip A. Choyce, each of whom is named asattorney-in-fact in the proxies.
This proxy statement and the accompanying notice and form of proxy will be first mailed to stockholders on or about , 2019.
INDEPENDENCE CONTRACT DRILLING, INC.
PROXY STATEMENT
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PROPOSAL 2 ADJOURNMENT OR POSTPONEMENT OF THE SPECIAL MEETING OF STOCKHOLDERS | 14 | |||
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT | 15 | |||
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A-1 |
IMPORTANT INFORMATION ABOUT THE SPECIAL MEETING AND VOTING
The following questions and answers briefly address some commonly asked questions about the Special Meeting and this proxy statement. They may not include all the information that is important to you. You should carefully read this entire proxy statement, including the annexes and the other documents referred to herein.
Q: | Why are you receiving this proxy statement? |
A: | The Company’s Board is soliciting your proxy to vote at a special meeting of our stockholders to be held at the offices of ICD (the “Special Meeting”), which are located at 20475 State Highway 249, First Floor Auditorium, Houston, TX 77070, on February 6, 2019 at 8:00 a.m., local time and any adjournment of the Special Meeting. The proxy statement along with the accompanying Notice of Special Meeting of Stockholders summarizes the purposes of the Special Meeting and the information you need to know to vote at the Special Meeting. |
We have sent you this proxy statement, the Notice of Special Meeting of Stockholders and the proxy card because you owned shares of ICD common stock on the record date. The Company intends to commence distribution of the proxy materials to stockholders on or about , 2019.
We are seeking approval of the Reverse Split Proposal in order to (i) meet continued listing standards of the New York Stock Exchange (“NYSE”), and (ii) improve liquidity in our common stock as discussed below. Giving effect to the Reverse Stock Split Proposal, based on our 76,319,474 shares of outstanding common stock as of November 26, 2019, we would have outstanding between approximately 7,631,947 and 3,815,974 shares of common stock.
We will hold the Special Meeting in order to seek this approval. This proxy statement contains important information about the Special Meeting, us, and the Reverse Split Proposal, and you should read it carefully.
Q: | Why is ICD proposing the Reverse Split Proposal? |
A: | The Company’s Board has determined that the Reverse Split Proposal is advisable and in the best interests of the Company’s stockholders. In approving the Reverse Split Proposal and making these determinations, the Board consulted with the Company’s management as well as the Company’s financial advisor and legal counsel, and considered a number of factors. The anticipated beneficial factors included: |
meeting NYSE continued listing standards for trading on the NYSE;
reducing appeal to electronic trading firms, to whom lower priced shares with steady volume offer greater profit potential;
improving appeal to retail investors;
reducing per share elements of trading costs;
eliminating negative connotation associated with lower-priced stocks; and
reducing volatility.
The anticipated risks considered by the Board included:
failure to realize expected benefits;
increasing the percentage of authorized but unissued shares; and
limiting the Company’s ability to raise new equity capital in the future.
Q: | How does the ICD Board recommend you vote on the proposals? |
A: | Our Board recommends that you vote as follows: |
“FOR” an amendment to the Company’s Certificate of Incorporation to effect aone-time reverse stock split (the “Reverse Split Amendment”) of common stock at a ratio of 1share-for-10 shares up to a ratio of 1share-for-20 shares, which ratio will be selected by the Company’s Board of Directors and set forth in a public announcement, together with a reduction in the authorized number of shares of the Company’s common stock from 200,000,000 shares to 50,000,000 shares (the “Reverse Split Proposal”).
“FOR” the adjournment or postponement of the Special Meeting of stockholders, if necessary, to solicit additional proxies in the event that there are not sufficient votes at the time of the Special Meeting of stockholders to approve the Reverse Split Proposal.
If any other matter is presented at the Special Meeting, your proxy provides that your shares will be voted by the proxy holder listed in the proxy statement in accordance with his or her best judgment. At the time this proxy statement was first made available, we knew of no matters that needed to be acted on at the Special Meeting, other than those discussed in this proxy statement.
Q: What vote is required by ICD stockholders to approve the proposals? | ||
A: Proposal 1: Approve an Amendment to the Amended and Restated Certificate of Incorporation to Effect a Reverse Split of the Company’s common stock | Pursuant to applicable New York Stock Exchange Listed Company Manual rules, the Delaware General Corporation Law and the Bylaws of the Company, the affirmative vote of a majority of the shares present in person or represented by proxy at the Special Meeting and entitled to vote on the Reverse Split Proposal is required to approve an amendment to the Certificate of Incorporation. Abstentions will be treated as votes against this proposal. Brokerage firms do not have authority to vote customers’ unvoted shares held by the firms in street name on this proposal. As a result, any shares not voted by a customer will be treated as a brokernon-vote. Such brokernon-votes will have no effect on the results of this vote. | |
Proposal 2: Approve the Adjournment or Postponement of the Special Meeting, if necessary | Pursuant to the Delaware General Corporation Law and the Bylaws of the Company, the affirmative vote of a majority of the shares present in person or represented by proxy at the Special Meeting and entitled to vote on the adjournment or postponement of the Special Meeting, if necessary is required to approve such adjournment or postponement. Abstentions will have no effect on the results of this vote. Brokerage firms do not have authority to vote customers’ unvoted shares held by the firms in street name on this proposal. As a result, any shares not voted by a customer will be treated as a brokernon-vote. Such brokernon-votes will have effect on the results of this vote. |
Q: | What amendments are being made to the Certificate of Incorporation pursuant to the Reverse Split Proposal? |
A: | The first paragraph of Article IV would be amended to reduce the number of authorized shares of common stock from 200,000,000 to 50,000,000 as follows: |
“1. This Corporation is authorized to issue two classes of stock to be designated, respectively, “Common Stock” and “Preferred Stock.” The total number of shares of stock which the Corporation shall have the authority to issue is 60,000,000 consisting of 50,000,000 shares of Common Stock, with a par value of $.01 per share and 10,000,000 shares of Preferred Stock, with a par value of $.01 per share. Each share of Common Stock shall entitle the holder thereof to one (1) vote on each matter submitted to a vote at any meeting of stockholders; provided, that, except as otherwise required by law, holders of Common Stock, as such, shall not be entitled to vote on any amendment to this Certificate (including, but not limited to, any certificate of designations relating to any series of Preferred Stock) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other such series, to vote thereon pursuant to this Certificate (including, but not limited to, any certificate of designations relating to any series of Preferred Stock) or pursuant to the DGCL.”
Article IV of the Amended and Restated Certificate of Incorporation would be amended and restated to add the following paragraph as follows:
“4. Upon this Certificate of Amendment becoming effective pursuant to the General Corporation Law of the State of Delaware (the “Effective Time”), each share of Common Stock, either issued and outstanding or held by the Corporation as treasury stock, in each case immediately prior to the Effective Time (the “Old Common Stock”), shall be automatically reclassified as and converted into [1/10 to 1/20] of a fully paid and nonassessable share of Common Stock (the “New Common Stock”). No fractional shares of the New Common Stock shall be issued in connection with the Reverse Stock Split. The Company will pay cash in lieu of any fractional shares. Cash paid in lieu of any fractional shares shall be determined based on the average closing market price of the Old Common Stock on the New York Stock Exchange (or if the Old Common Stock does not remain listed thereon, on the principal securities exchange or quotation service for the Old Common Stock, as determined by the Board of Directors of the Corporation) for the ten trading days immediately preceding the day of the Effective Time, with payment for eachone-tenth of a share of New Common Stock being equal to the average closing price of one share of Old Common Stock on the New York Stock Exchange (or if the Old Common Stock does not remain listed thereon, on the principal securities exchange or quotation service for the Old Common Stock, as determined by the Board of Directors of the Corporation). Any stock certificate that, immediately prior to the Effective Time, represented shares of the Old Common Stock, shall from and after the Effective Time, automatically and without the necessity of presenting the same for exchange, represent that number of whole shares of New Common Stock into which such shares of Old Common Stock shall have been reclassified pursuant to this Certificate of Amendment.”
Q: | What do you need to do now? |
A: | We urge you to carefully read and consider the information contained in this proxy statement, including the annexes, and to consider how the Reverse Split Proposal affects you as a stockholder. You should then vote as soon as possible in accordance with the instructions provided in this document and on the enclosed proxy card. |
Q: | When and where is the Special Meeting? |
A: | The Special Meeting of our stockholders will be held at the offices of ICD, which are located at 20475 State Highway 249, First Floor Auditorium, Houston, TX 77070, on February 6, 2020 at 8:00 a.m., local time. |
Q: | What constitutes a quorum for the Special Meeting? |
A: | The presence, in person or by proxy, of the holders of a majority of the shares of our common stock entitled to vote at any meeting of stockholders is necessary to constitute a quorum at the Special Meeting. Votes of stockholders of record who are present at the Special Meeting in person or by proxy, abstentions, and brokernon-votes are counted for purposes of determining whether a quorum exists. |
Q: | Who can vote? |
A: | Only stockholders who owned common stock at the close of business on December 16, 2019 are entitled to vote at the Special Meeting. On this record date, there were shares of our common stock outstanding and entitled to vote. |
You do not need to attend the Special Meeting to vote your shares. Shares represented by valid proxies, received in time for the Special Meeting and not revoked prior to the Special Meeting, will be voted at the Special Meeting. For instructions on how to change your proxy, see “Can you change your vote after you have mailed your signed proxy?” below.
Q: | How many votes do you have? |
A: | Each share of our common stock that you own entitles you to one vote. |
Q: | How do you vote? |
A: | If you are a record holder, meaning your shares are registered in your name, you may vote: |
(1) | Over the Internet:Go to the websitewww.proxyvote.com,have your vote instruction form in hand, and follow the simple instructions. (When voting online, you may also give your consent to have all future proxy materials delivered to you electronically.) You must specify how you want your shares voted or your Internet vote cannot be completed and you will receive an error message. Your shares will be voted according to your instructions. |
(2) | By Telephone:Call, toll-free,1-800-690-6903 and have your vote instruction form in hand and follow the recorded instructions. You must specify how you want your shares voted and confirm your vote at the end of the call or your telephone vote cannot be completed. Your shares will be voted according to your instructions. |
(3) | By Mail:Complete and sign your enclosed proxy card and mail it in the enclosed postage prepaid envelope to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. Your shares will be voted according to your instructions. If you do not specify how you want your shares voted, they will be voted as recommended by our Board. |
(4) | In Person at the Special Meeting:If you attend the Special Meeting, you may deliver your completed proxy card in person or you may vote by completing a ballot, which we will provide to you at the Special Meeting. |
Please note that voting via the Internet and telephone will only be available until 11:59 p.m. (Eastern) on February 5, 2020, the day prior to the Special Meeting.
If your shares are held in “street name”, meaning they are held for your account by a broker or other nominee, you may vote:
(1) | Over the Internet or by Telephone:You will receive instructions from your broker or other nominee if they permit Internet or telephone voting. You should follow those instructions. |
(2) | By Mail:You will receive instructions from your broker or other nominee explaining how you can vote your shares by mail. You should follow those instructions. |
(3) | In Person at the Special Meeting:Contact your broker or other nominee who holds your shares to obtain a brokers’ proxy card and bring it with you to the Special Meeting. You will not be able to vote in person at the Special Meeting unless you have a proxy from your broker issued in your name giving you the right to vote your shares. |
Q: | What if you receive more than one proxy card? |
A: | You may receive more than one proxy card if you hold shares of our common stock in more than one account, which may be in registered form or held in street name. Please vote in the manner described above under “How do you vote?” for each account to ensure that all of your shares are voted. |
Q: | Will your shares be voted if you do not vote? |
A: | If your shares are registered in your name or if you have stock certificates, they will not be counted if you do not vote as described above under “How do you vote?”. If your shares are held in street name and you do not provide voting instructions to the bank, broker or other nominee that holds your shares as described above, the bank, broker or other nominee that holds your shares will not have the authority to vote your unvoted shares without receiving instructions from you. Therefore, we encourage you to provide voting instructions to your bank, broker or other nominee. This ensures your shares will be voted at the Special Meeting and in the manner you desire. A “brokernon-vote” will occur if your broker cannot vote your shares on a particular matter because it has not received instructions from you and does not have discretionary voting authority on that matter. |
Thus, if you hold your shares in street name and you do not instruct your bank, broker or other nominee how to vote in the election of directors or on matters related to the Reverse Stock Split Proposal, no votes will be cast on these proposals on your behalf.
Q: | Can you change your vote after you have mailed your signed proxy? |
A: | Yes. If you want to change your vote, send a later dated, signed proxy card to Independence Contract Drilling, Inc., at 20475 State Highway 249, Suite 300, Houston, TX 77070, before the Special Meeting or attend the Special Meeting and vote in person, or you may vote over the Internet or by telephone as only your latest Internet or telephone vote received before the Special Meeting will be counted. You may also revoke your proxy by sending written notice to our corporate secretary before the Special Meeting. If you have instructed your broker to vote your shares, you must follow your broker’s directions in order to change those instructions. |
Q: | Who will bear the costs of the proxy solicitation? |
A: | We will bear the costs of soliciting proxies, including the printing, mailing and filing of this proxy statement and any additional information furnished to stockholders. Our directors, officers and employees may also solicit proxies by telephone, email, facsimile and in person, without additional compensation. Upon request, we will reimburse brokerage houses and other custodians, nominees and fiduciaries for their reasonableout-of-pocket expenses for distributing proxy materials. |
Q: | Where can I find the voting results of the Special Meeting? |
A: | The preliminary voting results will be announced at the Special Meeting, and we will publish preliminary, or final results if available, in a Current Report on Form8-K within four business days of the Special |
Meeting. If final results are unavailable at the time we file theForm 8-K, then we will file an amended report onForm 8-K to disclose the final voting results within four business days after the final voting results are known. |
Q: | Whom should you call with questions? |
A: | If you have any questions about the proposals to be considered at the Special Meeting, or if you need additional copies of this document or the enclosed proxy, please contact our Corporate Secretary, at 20475 State Highway 249, Suite 300, Houston, TX 77070 or by telephone at (281)598-1230. |
You may also obtain additional information about us from documents filed with the Securities and Exchange Commission by following the instructions under “Where You Can Find More Information” on page 20.
REVERSE SPLIT PROPOSAL
APPROVAL OF AN AMENDMENT TO OUR AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO EFFECT A REVERSE SPLIT OF THE COMPANY’S COMMON STOCK
Reasons for the Reverse Split Proposal
The Board has unanimously adopted a resolution authorizing, approving, declaring advisable and recommending to the Company’s stockholders for their approval an amendment to the Company’s Amended and Restated Certificate of Incorporation to effect a reverse split of the outstanding and treasury shares of the Company’s common stock in a ratio of 1share-for-10 shares up to a ratio of 1share-for-20 shares, together with a reduction in the authorized number of shares of the Company’s common stock from 200,000,000 shares to 50,000,000 shares (the “Reverse Split Amendment”), which ratio will be selected by the Board following stockholder approval and prior to the time of filing of a Certificate of Amendment with the Delaware Secretary of State and set forth in a public announcement. The form of Reverse Split Amendment is attached to this proxy statement asAnnex A.
The Board believes that a reverse stock split is necessary to regain compliance with the NYSE’s minimum $1.00 bid price requirement, as described below, and may improve liquidity with respect to the Company’s common stock discussed herein.
Potential Effects of the Amendment
If Proposal 1 is approved at the Special Meeting, the Company may issue the shares of common stock that would become available for issuance upon completion of any reverse split (i) pursuant to future securities offering transactions, (ii) pursuant to future acquisition transactions involving payment of consideration in equity securities of the Company and (iii) other general corporate purposes.
If the Board determines to implement the Reverse Split Amendment, the Company would communicate to the public, prior to the effective time of the Reverse Split Amendment, additional details regarding the Reverse Split Amendment (including the final reverse split ratio, as determined by the Board). The Board reserves the right to elect not to proceed with the Reverse Split Amendment if it determines, in its sole discretion, that the Reverse Split Amendment is no longer in the best interests of the Company or its stockholders.
In determining which reverse split amendment to implement, if any, following receipt of stockholder approval of this Proposal 1, the Board may consider, among other things, various factors, such as:
the historical trading price and trading volume of our common stock;
the then-prevailing trading price and trading volume of our common stock and the expected impact of the Reverse Split on the trading market for our common stock in the short- and long-term;
the Company’s ability to continue its listing on the New York Stock Exchange;
which reverse split amendment would result in the least administrative cost to us; and
prevailing general market and economic conditions.
The failure of stockholders to approve this Proposal 1 could prevent the Company from regaining compliance with the NYSE’s $1.00 minimum bid price requirement (the “Minimum Bid Price Requirement”), unless the market price of our common stock increases above the Minimum Bid Price Requirement without a reverse split for at least 10 consecutive trading days. If NYSE delists our common stock, then our common stock would likely
become traded on the over the counter market maintained by OTC Markets Group Inc. (the “OTC”), which does not have the substantial corporate governance or quantitative listing requirements for continued trading that the NSYE has. In that event, interest in our common stock may decline and certain institutions may not have the ability to trade in our common stock, all of which could have a material adverse effect on the liquidity or trading volume of our common stock. If our common stock becomes significantly less liquid due to delisting from the NYSE, our shareholders may not have the ability to liquidate their investments in our common stock as and when desired and we believe our access to capital would become significantly diminished as a result. Also, due to certain state securities (blue sky) law requirements which apply to securities that are not listed on an exchange, our ability to consummate future public offerings would be materially limited, and could require that the Company undertake private placements on terms that are significantly less favorable than the terms of a public offering.
Reasons for the Reverse Split
To maintain our NYSE Listing.
The Company’s common stock is listed on the NYSE. On November 5, 2019, the NYSE provided notice to the Company that the decline in the share price of the Company’s common stock has caused it to be out of compliance with one of the NYSE’s continued listing standards. Section 802.01C of the NYSE Listed Company Manual requires the average closing price of a listed company’s common stock to be at least $1.00 per share over a consecutive 30trading-day period to comply with the NYSE continued listing standards. As required by the NYSE rules, the Company notified the NYSE, within 10 business days of receipt of thenon-compliance notice, of its intent to return to compliance with the NYSE continued listing standard.
Under the NYSE’s rules, in order to get back in compliance with the listing standard, both the Company’s closing share price on the last day of any calendar month and the average closing share price (over a consecutive30-trading day period ending on the last day of that month) must exceed $1.00 within six months following receipt of thenon-compliance notice. Notwithstanding the foregoing, if the Company determines to remedy thenon-compliance by taking action that will require shareholder approval, such as the reverse stock split, the NYSE will continue to list the Company’s common stock pending shareholder approval by no later than its next annual meeting, and the implementation of such action promptly thereafter. The Company will be back in compliance with its listing standard if the share price promptly exceeds $1.00 per share, and the price remains above the level for at least the following 30 trading days.
To potentially improve the liquidity of our common stock.
A reverse split could allow a broader range of institutions to invest in our common stock (namely, funds that are prohibited from buying stocks whose price is below a certain threshold), potentially increasing trading volume and liquidity of our common stock and potentially decreasing the volatility of our common stock if institutions become long-term holders of our common stock. A reverse split could help increase analyst and broker interest in our common stock as their policies can discourage them from following or recommending companies with low stock prices. Because of the trading volatility often associated withlow-priced stocks, many brokerage houses and institutional investors have internal policies and practices that either prohibit them from investing inlow-priced stocks or tend to discourage individual brokers from recommendinglow-priced stocks to their customers. Some of those policies and practices may make the processing of trades inlow-priced stocks economically unattractive to brokers. Additionally, because brokers’ commissions onlow-priced stocks generally represent a higher percentage of the stock price than commissions on higher-priced stocks, a low average price per share of common stock can result in individual stockholders paying transaction costs representing a higher percentage of their total share value than would be the case if the share price were 77,078,252higher.
If the Reverse Split Proposal is approved and the Board believes that effecting the reverse split is in the best interests of the Company and its stockholders, the Board may effect the reverse split regardless of whether the Company’s stock is delisted from the NYSE, for purposes of enhancing the liquidity of the Company’s common stock and to facilitate capital raising if the Company becomes traded on theover-the-counter market.
Certain Risks Associated with a Reverse Split
There can be no assurance that the reverse split will increase the market price of the common stock and have the desired effect of maintaining compliance with the Minimum Bid Price Requirement. The Board believes that a reverse split has the potential to increase the market price of the common stock so that the Company may be able to satisfy the Minimum Bid Price Requirement. However, the long- and near-term effect of the reverse split upon the market price of the common stock cannot be predicted with any certainty.
Moreover, the total market capitalization of the common stock after the reverse split may be lower than the total market capitalization before the reverse split. As of the record date, our market capitalization was $ million, notwithstanding that we had shares outstanding as of the record date.
Further, following any reverse stock split, we will have additional shares available to issue upon conversion or exercise of securities of the Company that are convertible into or exercisable for common stock. In addition, we will continue to require significant proceeds from sales of our debt or equity securities to fund our operations for the near future, which will cause further dilution to stockholders. The issuance of a substantial amount of shares of common stock or securities convertible into or exercisable for common stock in the future could cause downward pressure on the price of our common stock and there is no assurance that the market price for the common stock will remain at a level sufficient to satisfy the Minimum Bid Price Requirement.
Impact of a Reverse Split If Implemented
A reverse split would affect all of our common stockholders uniformly and would not affect any stockholder’s percentage ownership interests or proportionate voting power. The other principal effects of the reverse split will be that:
the number of issued and outstanding shares of common stock (and treasury shares) will be reduced proportionately based on the final reverse split ratio, as determined by the Board;
based on the final reverse split ratio, the per share exercise price of all outstanding options will be increased proportionately and the number of shares of common stock issuable upon the exercise of all outstanding options will be reduced proportionately;
the number of shares reserved for issuance and any maximum number of shares with respect to which equity awards may be granted to any participant under the Company’s 2019 Omnibus Incentive Plan will be reduced proportionately based on the final reverse split ratio (as previously announced, no further awards will be made under the Company’s 2012 Omnibus Long-Term Incentive Plan);
the number of shares of our authorized common stock will be reduced from 200,000,000 to 50,000,000, and the percentage of such shares that are unissued and not reserved for future issuance will increase; and
all share and per share amounts in our financial statements and notes thereto will be retroactively adjusted for all periods presented to give effect to this reverse stock split.
Although the number of outstanding shares of common stock would decrease following the Reverse Split Amendment, the Board does not intend for a reverse split to be the first step in a “going private transaction” within the meaning of Rule13e-3 of the Exchange Act.
The following table reflects the number of shares of common stock that would be outstanding as a result of the effectiveness of the Reverse Split Amendment and the approximate percentage reduction in the number of outstanding shares based on 76,319,474 shares of common stock issued and outstanding and entitled to vote.
Proposed Reverse Split Ratio | Approximate Percentage Reduction | Approximate Shares of Common Stock to be Outstanding After the Reverse Split | Shares of Common Stock Available for Issuance After the Reverse Split | |||||||||
1-for-10 | 90 | % | 7,631,947 | 42,368,053 | ||||||||
1-for-20 | 95 | % | 3,815,974 | 46,184,026 |
Effect of Reverse Split and Potential Anti-Takeover Effect
Management does not anticipate that our financial condition, the percentage ownership of common stock by management, the number of our stockholders, or any aspect of our business will materially change as a result of the Reverse Split Amendment. Because the Reverse Split Amendment will apply to all issued and outstanding shares of common stock and outstanding rights to purchase common stock or to convert other securities into common stock, the proposed Reverse Split Amendment will not alter the relative rights and preferences of existing stockholders. However, while the number of shares of common stock outstanding will be decreased by a1-for-10 up to1-for-20 ratio, the number of authorized shares will be decreased to 50,000,000 from 200,000,000 (effectively a1-for-4 ratio decrease).
Management does not currently plan to use the effective increase in the percentage of our authorized but unissued shares that will result from the Reverse Split Amendment to make it more difficult or to discourage a future merger, tender offer or proxy contest or the removal of incumbent management. This Proposal 1 is not the result of management’s knowledge of an effort to accumulate our securities or to obtain control of the Company LLC, then youby means of a merger, tender offer, solicitation or otherwise.
Summarized in the following paragraphs are provisions included in our Certificate of Incorporation, as amended, and our bylaws that may have the effect of discouraging, delaying or preventing a change in control or an unsolicited acquisition proposal that a stockholder might consider favorable, including a proposal that might result in the payment of record. As a stockholder of record, you may vote in person at the Annual Meeting or vote by proxy. Whether or not you plan to attend the Annual Meeting, we urge you to fill out
Effects of authorized but unissued common stock and blank check preferred stock. One of the effects of the existence of authorized but unissued common stock and undesignated preferred stock may be to enable our Board to make more difficult or onto discourage an attempt to obtain control of the internet as instructed below to ensure your vote is counted.
In addition, our Certificate of Incorporation grants our Board broad power to establish the rights and preferences of authorized and unissued shares of additional series of preferred stock. The creation and issuance of one or more additional series of preferred stock could decrease the amount of earnings and assets available for 2019, you may vote “Against” the approval of such proposal or you may abstain from voting.
Cumulative Voting. Our Certificate of the 2019 Omnibus Plan and abstentions received.
Vacancies. Section 223 of the Delaware General Corporation Law and our bylaws provide that all vacancies, including newly created directorships, may be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum.
Fractional Shares
If the reverse stock split ratio determined to be implemented by the Board, if any, will result in fractional shares, representedthe Company will not issue fractional shares. Instead, the Company will pay cash in personlieu of the fractional share. Cash paid in lieu of any fractional shares shall be determined based on the average closing market price of the old common stock on the New York Stock Exchange (or if the old common stock does not remain listed thereon, on the principal securities exchange or quotation service for the old common stock, as determined by proxythe Board) for the ten trading days immediately preceding the day of the Effective Time, with payment for eachone-tenth of a share of new common stock being equal to the average closing price of one share of old common stock on the New York Stock Exchange (or if the old common stock does not remain listed thereon, on the principal securities exchange or quotation service for the old common stock, as determined by the Board).
Certain U.S. Federal Income Tax Consequences of the Reverse Stock Split
The following discussion is a general summary of certain U.S. federal income tax consequences of the reverse split that may be relevant to U.S. Holders (as defined below) of our common stock, but does not purport to be a complete analysis of all potential tax effects. The effects of other U.S. federal tax laws, such as estate and gift tax laws, and any applicable state, local ornon-U.S. tax laws are not discussed. This discussion is based on the Internal Revenue Code of 1986, as amended (the “Code”), Treasury regulations promulgated thereunder (the “Treasury Regulations”), judicial decisions, and published rulings and administrative pronouncements of the U.S. Internal Revenue Service (“IRS”), in each case in effect as of the date hereof. These authorities may change or be subject to differing interpretations. Any such change or differing interpretation may be applied retroactively in a manner that could adversely affect a holder of our common stock. We have not sought and will not seek an opinion of counsel or any rulings from the IRS regarding the matters discussed below. There can be no assurance the IRS or a court will not take a contrary position to that discussed below regarding the tax consequences of the reverse split.
This discussion is limited to holders that hold our common stock as “capital assets” within the meaning of Section 1221 of the Code (generally, property held for investment). This discussion does not address all aspects of U.S. federal income tax consequences relevant to such holders’ particular circumstances, including the impact of the tax on net investment income imposed by Section 1411 of the Code. In addition, it does not address consequences relevant to holders subject to particular rules, including, without limitation:
persons that are not U.S. Holders (as defined below);
persons subject to the alternative minimum tax;
U.S. Holders (as defined below) whose functional currency is not the U.S. dollar;
persons holding our common stock as part of a hedge, straddle or other risk reduction strategy or as part of a conversion transaction or other integrated investment;
banks, insurance companies or other financial institutions;
real estate investment trusts or regulated investment companies;
brokers, dealers or traders in securities;
S corporations, partnerships or other entities or arrangements treated as partnerships for U.S. federal income tax purposes (and investors therein);
tax-exempt organizations or governmental organizations;
persons deemed to sell our common stock under the constructive sale provisions of the Code;
persons who hold or receive our common stock pursuant to the exercise of any employee stock option or otherwise as compensation; and
tax-qualified retirement plans.
If an entity treated as a partnership for U.S. federal income tax purposes holds our common stock, the tax treatment of a partner in the partnership will depend on the status of the partner, the activities of the partnership and certain determinations made at the Annual Meeting.
THIS DISCUSSION IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT INTENDED AS TAX ADVICE. HOLDERS OF OUR COMMON STOCK SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE APPLICATION OF THE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY TAX CONSEQUENCES OF THE REVERSE STOCK SPLIT ARISING UNDER OTHER U.S. FEDERAL TAX LAWS (INCLUDING ESTATE AND GIFT TAX LAWS), UNDER THE LAWS OF ANY STATE, LOCAL ORNON-U.S. TAXING JURISDICTION OR UNDER ANY APPLICABLE TAX TREATY.
For purposes of the total number of votes cast. Broker non-votes occur whendiscussion below, a “U.S. Holder” is a beneficial owner of shares held in “street name” does not give instructions to the brokerage firm, bank, dealer or nominee holding the shares as to how to vote on matters deemed “non-routine.” Generally, if shares are held in street name, the beneficial owner of the shares is entitled to give voting instructions to the broker or nominee holding the shares. If the beneficial owner does not provide voting instructions, the broker or nominee can still vote the shares with respect
A reverse split should constitute a “recapitalization” for U.S. federal income tax purposes. As a result, a U.S. Holder generally should not recognize gain or loss upon the reverse split, except with respect to cash received in lieu of a fractional share of our common stock. A U.S. Holder’s aggregate tax basis in the shares of our common stock received pursuant to the reverse split should equal the aggregate tax basis of the shares of our common stock surrendered (excluding any portion of such basis that proposal. Accordingly,is allocated to any fractional share of our common stock), and such U.S. Holder’s holding period in the shares of our common stock received should include the holding period in the shares of our common stock surrendered. Treasury Regulations provide detailed rules for allocating the tax basis and holding period of the shares of our common stock surrendered to the shares of our common stock received pursuant to the reverse split. Holders of shares of our common stock acquired on different dates and at different prices should consult their tax advisors regarding the allocation of the tax basis and holding period of such shares.
A U.S. Holder that, pursuant to the proposed reverse split, receives cash in lieu of a fractional share of our common stock should recognize capital gain or loss in an amount equal to the difference, if you ownany, between the amount of cash received and the portion of the U.S. Holder’s aggregate adjusted tax basis in the shares throughof our common stock surrendered that is allocated to such fractional share. Such capital gain or loss will constitute long-term capital gain or loss if the holder’s holding period is greater than one year as of the effective date of the reverse stock split.
Information Reporting and Backup Withholding. A U.S. Holder (other than corporations and certain other exempt recipients) may be subject to information reporting and backup withholding when such holder receives cash in lieu of a nominee,fractional share of our common stock pursuant to the reverse split. A U.S. Holder will be subject to
backup withholding if such holder is not otherwise exempt and such holder does not provide its taxpayer identification number in the manner required or otherwise fails to comply with applicable backup withholding tax rules. Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be refunded or allowed as a broker or bank, please be surecredit against the U.S. Holder’s federal income tax liability, if any, provided the required information is timely furnished to instruct your nominee howthe IRS. U.S. Holders should consult their tax advisors regarding their qualification for an exemption from backup withholding and the procedures for obtaining such an exemption.
Vote Required to voteApprove the Reverse Split Proposal
Pursuant to ensure that your vote is counted on each of the proposals.
Effectiveness of the 2019 Omnibus Plan must receive, in accordanceAmendment and Vote Required
If the Board decides to implement a reverse split, the reverse split will become effective on the date the Reverse Split Amendment is filed with Section 1.7the Secretary of State of the Company’s Bylaws,State of Delaware. The time of such filing, if any, will be determined by the Board in its sole discretion. Beginning on the effective time of the Reverse Split Amendment, each certificate representingpre-reverse split shares of common stock will be deemed for all corporate purposes to evidence ownership of post-reverse split shares of common stock. If the Reverse Split Amendment is not effective under the DGCL prior to December 31, 2020, the Reverse Split Amendment will be abandoned and no reverse stock split will be effected by the Board.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE PROPOSAL TO AMEND THE COMPANY’S CHARTER TO EFFECT A REVERSE SPLIT OF THE COMPANY’S COMMON STOCK
PROXIES SOLICITED BY THE BOARD WILL BE VOTED IN FAVOR OF THIS PROPOSAL UNLESS A STOCKHOLDER INDICATES OTHERWISE ON THE PROXY.
ADJOURNMENT OR POSTPONEMENT OF THE SPECIAL MEETING OF STOCKHOLDERS
You may be asked to vote to approve a proposal to adjourn or postpone the Special Meeting, if necessary, to solicit additional proxies in the event that there are not sufficient votes at the time of the Special Meeting to approve the Stock Issuance Proposal set forth in this proxy statement. We currently do not intend to propose adjournment or postponement of the Special Meeting of stockholders if there are sufficient votes to approve the other proposals.
Vote Required
Pursuant to our bylaws, the affirmative vote of a majority of the shares represented in person or by proxy at the Annual Meeting. As noted above, you may vote “For” approval of the adoption of the 2019 Omnibus Plan, you may vote “Against” approval of such proposal or you may abstain from voting. Abstentions will be counted as shares entitled to vote and have the same effect as a vote “Against” Proposal 2. A broker non-vote will be counted for purposes of establishing a quorum, but will not be treated as a share entitled to vote on Proposal 2. Therefore, broker non-votes will have the effect of reducing the absolute number of shares necessary to approve Proposal 2.
OUR BOARD RECOMMENDS A VOTE “FOR” THE PROPOSAL TO ADJOURN OR POSTPONE THE SPECIAL MEETING, IF NECESSARY, TO SOLICIT ADDITIONAL PROXIES IF THERE ARE NOT SUFFICIENT VOTES IN FAVOR OF THE STOCK ISSUANCE PROPOSAL, AND PROXIES SOLICITED BY THE BOARD WILL BE VOTED IN FAVOR OF SUCH APPROVAL UNLESS A STOCKHOLDER INDICATES OTHERWISE ON THE PROXY.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information, as of November 26, 2019, for: (1) each person known by us to another place, if any, date and time.
Footnote 1 to the following table provides a brief explanation of what is meant by the term “beneficial ownership.” The number of shares beneficially owned, the shares acquirable within 60 days and the percentages of beneficial ownership are based on 76,319,474 shares of common stock outstanding as of June 30November 26, 2019, the number of shares owned on November 26, 2019 and the number of shares acquirable within 60 days of November 26, 2019 by the named person assuming no other person exercised options, with the exception of the year such determination is made; (3) the dateamounts reported in filings on Schedule 13G or 13D, which we issue more than $1.0 billionamounts are based on holdings as of non-convertible debt over a three-year period; or (4) the last day of the fiscal year following the fifth anniversary of our Initial Public Offering (“IPO”) (which fiscal year will be 2019). Currently, we believe we will cease to be an emerging growth company on December 31, 2019.
To our knowledge and how does it affect me?
Name and Address of Beneficial Owners (1)(2) | Shares Beneficially Owned (3) | Shares Acquirable within 60 days (4) | Total | Percent of Common Stock Beneficially Owned | ||||||||||||
5% Stockholders: | ||||||||||||||||
MSD Capital, L.P.(5) | 4,471,800 | — | 4,471,800 | 5.9 | % | |||||||||||
MSD Partners, L.P.(6) | 18,838,512 | — | 18,838,512 | 24.7 | % | |||||||||||
Anthem, Inc.(7) | 4,046,591 | — | 4,046,591 | 5.3 | % | |||||||||||
Birch Grove Capital LP(8) | 4,252,659 | — | 4,252,659 | 5.6 | % | |||||||||||
Directors and Named Executive Officers: | ||||||||||||||||
Thomas R. Bates, Jr.(9) | 231,110 | — | 231,110 | * | ||||||||||||
J. Anthony Gallegos, Jr.(10) | 493,710 | — | 493,710 | * | ||||||||||||
James D. Crandell(11) | 44,634 | — | 44,634 | * | ||||||||||||
Matthew D. Fitzgerald(12) | 62,606 | — | 62,606 | * | ||||||||||||
Daniel F. McNease(13) | 77,080 | — | 77,080 | * | ||||||||||||
James G. Minmier(14) | 35,818 | — | 35,818 | * | ||||||||||||
Adam J. Piekarski(15) | — | — | — | * | ||||||||||||
Philip A. Choyce(16) | 623,934 | 157,000 | 780,934 | 1.0 | % | |||||||||||
Christopher K. Menefee(17) | 341,593 | 58,875 | 400,468 | * | ||||||||||||
Byron A. Dunn(18) | 30 | 400,350 | 400,380 | * | ||||||||||||
All Directors and Executive Officers as a Group (12 persons):(19) | 2,428,890 | 215,875 | 2,644,765 | 3.5 | % |
* | Less than 1%. |
(1) | “Beneficial ownership” is a term broadly defined by the SEC in Rule13d-3 under the Exchange Act and includes more than the typical forms of stock ownership, that is, stock held in the person’s name. The term also includes what is referred to as “indirect ownership” meaning ownership of shares as to which a person has or shares investment or voting power, or a person who, through a trust or proxy, prevents the person from having beneficial ownership. |
(2) | The address for each Named Executive Officer and director set forth in the table, unless otherwise indicated, is c/o Independence Contract Drilling, Inc., 20475 State Highway 249, Suite 300, Houston, Texas 77070. |
(3) | Amounts shown include common stock and restricted stock awards beneficially owned as of November 26, 2019, except for the amounts reported in filings on Schedule 13G or 13D, which amounts are based on |
holdings as of December 31, 2018, or as otherwise disclosed in such filings. Unvested restricted stock units that have been granted have been excluded from this figure but have been summarized in the footnotes to this table. |
(4) | Reflects the number of shares that could be purchased upon the exercise of options, warrants or other right of conversion held by the named person as of November 26, 2019 or within 60 days of November 26, 2019. |
(5) | As reported on Schedule 13D as of October 1, 2018, as filed by MSD Capital, L.P. with the SEC on October 3, 2018. MSD Energy Investments, L.P. is the record and direct beneficial owner of the shares. MSD Capital, L.P. is the general partner of, and may be deemed to beneficially own securities beneficially owned by MSD Energy Investments, L.P. MSD Capital Management, LLC is the general partner of, and may be deemed to beneficially own securities beneficially owned by, MSD Capital, L.P. Each of Glenn R. Fuhrman, John C. Phelan and Marc R. Lisker is a manager of, and may be deemed to beneficially own securities beneficially owned by MSD Capital Management, LLC. Michael S. Dell is the controlling member of MSD Capital Management, LLC and may be deemed to beneficially own securities beneficially owned by MSD Capital Management, LLC. MSD Capital’s address is 645 Fifth Avenue, 21st Floor, New York, New York 10022. |
(6) | As reported on Form 4 filed jointly by MSD Partners, L.P. and MSD Credit Opportunity Master Fund, L.P. with the SEC on May 28, 2019, and Schedule 13D as of October 1, 2018, as filed by MSD Partners, L.P. with the SEC on October 3, 2018. MSD Credit Opportunity Master Fund, L.P. is the record and direct beneficial owner of the shares. MSD Partners, L.P. is the manager of, and may be deemed to beneficially own securities beneficially owned by, MSD Credit Opportunity Master Fund, L.P. MSD Partners (GP), LLC is the general partner of, and may be deemed to beneficially own securities beneficially owned by, MSD Partners, L.P. Each of Glenn R. Fuhrman, John C. Phelan and Marc R. Lisker is a manager of, and may be deemed to beneficially own securities beneficially owned by, MSD Partners (GP), LLC. MSD Partner’s address is 645 Fifth Avenue, 21st Floor, New York, New York 10022. |
(7) | As reported on Schedule 13G as filed with the SEC on April 16, 2019. Anthem’s address is 220 Virginia Avenue, Indianapolis, Indiana 46204. |
(8) | As reported on Schedule 13G as of October 1, 2018, as filed by Birch Grove Capital, LP with the SEC on October 11, 2018. Birch Grove Capital LP (“Birch Grove”) is a registered investment advisor that serves as the investment manager for Birch Grove Credit Strategies Master Fund LP (the “Master Fund”) and other managed accounts.BGCSMF-01 LLC is a Delaware limited liability company that owns the shares on behalf of the Master Fund.BGCSMF-01 LLC owns 4,176,194 shares in the Company representing 5.5% of our outstanding common stock. Birch Grove Capital Management LLC (“Birch Grove Capital Management”) is the general partner of Birch Grove. Birch Grove Advisors LLC is the general partner of the Master Fund, and Jonathan I. Berger, manager of Birch Grove Advisors LLC and Birch Grove Capital Management, is the natural person who may be deemed to have voting, investment and/or dispositive power with respect to the equity securities listed in the preceding table held by Birch Grove. Birch Grove’s address is 660 Madison Avenue, 15th Floor, New York, New York 10065. |
(9) | Excludes 28,571 shares underlying restricted stock units that will not vest until February 27, 2020. The director has the option to settle 1/3 of the shares underlying the grant in cash or common stock, at the director’s election. Vested restricted stock units will be settled within 30 days of the vesting date. |
(10) | Includes 395,122 shares of restricted stock that vest ratably in 1/3 increments on each of December 26, 2021, December 26, 2022 and December 26, 2023. Excludes (i) 174,075 shares of common stock underlying restricted stock units that will vest ratably in 1/2 increments on October 1, 2020 and October 1, 2021; (ii) 205,000 shares of common stock underlying restricted stock units that vest ratably in 1/3 increments on February 27, 2020, February 27, 2021 and February 27, 2022; and (iii) 205,000 shares underlying performance restricted stock units that will not vest until February 27, 2022 based upon achievement of certain performance measures. |
(11) | Excludes 28,571 shares underlying restricted stock units that will not vest until February 27, 2020. The director has the option to settle 1/3 of the shares underlying the grant in cash or common stock, at the director’s election. Vested restricted stock units will be settled within 30 days of the vesting date. |
(12) | Excludes 28,571 shares underlying restricted stock units that will not vest until February 27, 2020. The director has the option to settle 1/3 of the shares underlying the grant in cash or common stock, at the director’s election. Vested restricted stock units will be settled within 30 days of the vesting date. |
(13) | Excludes 28,571 shares underlying restricted stock units that will not vest until February 27, 2020. The director has the option to settle 1/3 of the shares underlying the grant in cash or common stock, at the director’s election. Vested restricted stock units will be settled within 30 days of the vesting date. |
(14) | Excludes (i) 28,571 shares underlying restricted stock units that will not vest until February 27, 2020, and (ii) 14,154 shares underlying restricted stock units that will vest on October 1, 2021. The director has the option to settle 1/3 of the shares underlying the grant in cash or common stock, at the director’s election. Vested restricted stock units will be settled within 30 days of the vesting date. |
(15) | Mr. Piekarski is a principal with MSD Capital Partners L.P. He disclaims any beneficial ownership of any shares deemed to be beneficially owned by MSD Capital Partners L.P. |
(16) | Shares acquirable within 60 days include options to purchase 157,000 shares of common stock that are exercisable within 60 days of November 26, 2019. Includes 243,902 shares of restricted stock that vest ratably in 1/3 increments on each of December 26, 2021, December 26, 2022 and December 26, 2023. Excludes (i) 75,686 shares of common stock underlying restricted stock units that vest ratably in 1/3 increments on February 27, 2020, February 27, 2021 and February 27, 2022; and (ii) 75,686 shares underlying performance restricted stock units that will not vest until February 27, 2022 based upon achievement of certain performance measures. |
(17) | Shares acquirable within 60 days include options to purchase 58,875 shares of common stock that are exercisable within 60 days of November 26, 2019. Includes 213,414 shares of restricted stock that vest ratably in 1/3 increments on each of December 26, 2021, December 26, 2022 and December 26, 2023. Excludes (i) 31,857 shares of common stock underlying restricted stock units that vest ratably in 1/3 increments on February 27, 2020, February 27, 2021 and February 27, 2022; and (ii) 31,858 shares underlying performance restricted stock units that will not vest until February 27, 2022 based upon achievement of certain performance measures. |
(18) | Based on information provided by Mr. Dunn. Shares acquirable within 60 days include options to purchase 400,350 shares of common stock that are exercisable within 60 days of November 26, 2019. |
(19) | Current executive officer group excludes shares beneficially owned by former executive officer Byron A. Dunn. Shares acquirable within 60 days includes options to purchase 215,875 shares of common stock that are exercisable within 60 days of November 26, 2019. Includes all outstanding shares of restricted stock subject to vesting, but excludes unvested restricted stock units that do not vest within 60 days. |
Stockholders interested in submitting a proposal for inclusion in our Proxy Materialsproxy materials for our next annual meeting, and for presentation at the 2020 Annual Meeting of Stockholdersour next annual meeting, may do so by following the procedures set forth in Rule14a-8 under the Exchange Act. Provided that the date of such 2020 Annual Meeting of Stockholdersour next annual meeting is not more than 30 days from the date of the Annual Meeting,2020 annual meeting, such proposals must be submitted in writing to Independence Contract Drilling, Inc., 20475 State Highway 249, Suite 300, Houston, TX 77070, Attn: Corporate Secretary, no later than 120 calendar days before the date of the proxy statement released for the previous year’s Annual Meeting of Stockholders.annual meeting. Therefore, the deadline for submitting proposals for inclusion in our Proxy Materialsproxy materials for our next annual meeting, and for presentation at the 2020 Annual Meeting of Stockholdersour next annual meeting, is pursuant to Rule14a-8 is December 27, 2019. No stockholder proposal was received for inclusion in this Proxy Statement.
The Company'sCompany’s Amended and Restated Bylaws (“Bylaws”) require that stockholders interested in submitting a proposal or nominee for consideration at the 2020 Annual Meeting of Stockholders, which is not submitted for inclusion in our Proxy Materialsproxy materials pursuant to Rule14a-8 under the Exchange Act, may do so by following the procedures set forth in Section 1.3 of our Bylaws. Section 1.3 of our Bylaws requires any such proposals to be submitted in writing to Independence Contract Drilling, Inc., 20475 State Highway 249, Suite 300,
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to submit a proposal or nomination“incorporate by reference” the information in certain documents that we file with it, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is encouraged to seek independent counsel about our Bylaws and applicable Exchange Act requirements. We reserve the right not to consider any proposal or nomination that is not timely or otherwise does not meet our Bylaws or applicable Exchange Act requirements for submitting such proposal or nomination.
The Company’s Annual Report on Form10-K for the fiscal year ended December 31, 2018, which are located at 20475 State Highway 249, First Floor Auditorium, Houston, TX 77070, are availablecontains audited financial statements of the Company for the fiscal year ended December 31, 2018; and
The Company’s Quarterly Reports on Form10-Q for the fiscal quarters ended March 31, 2019, June 30, 2019 and September 30, 2019;
The Company’s Current Reports on Form8-K filed on March 5, 2019, June 4, 2019, August 1, 2019 and November 5, 2019 (except, with respect to each of the foregoing, for portions of such reports which were deemed to be furnished and not filed);
The Company’s proxy statement filed on Schedule 14A dated April 25, 2019 in connection with the Company’s 2019 annual meeting of stockholders, as incorporated by reference into the Company’s Annual Report on Form10-K for the fiscal year ended December 31, 2018; and
The description of the Company’s common stock contained in its Form8-A filed on August 5, 2014.
To the extent that any information contained in any Current Report onForm 8-K, or any exhibit thereto, was furnished, rather than filed with, the SEC, that information or exhibit is specifically not incorporated by reference in this document.
You may obtain copies of these documents, other than exhibits, free of charge on our website, at: http://www.icdrilling.com/contact.html.
Director Nominee | Position and Offices | Director Since | Age | |||
Thomas R. Bates, Jr. | Chairman of the Board, Director | 2011 | 69 | |||
J. Anthony Gallegos, Jr. | Chief Executive Officer, Director | 2018 | 49 | |||
James D. Crandell | Director | 2017 | 65 | |||
Matthew D. Fitzgerald | Director | 2012 | 61 | |||
Daniel F. McNease | Director | 2013 | 67 | |||
James G. Minmier | Director | 2018 | 55 | |||
Adam J. Piekarski | Director | 2018 | 37 |
You should rely only on the information contained or incorporated by emailing investor.relations@icdrilling.com. Any waiverreference in this proxy statement. We have not authorized anyone to provide you with information that is different from the information contained in this proxy statement. This proxy statement speaks only as of its date unless the information specifically indicates that another date applies.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other information with the SEC. You may read and copy any reports, proxy statements or other information filed by us at the SEC’s public reference room at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. Please call the SEC at1800-SEC-0330 for further information on the public reference rooms. You may also obtain copies of these reports, proxy statements and other documents at the SEC’s website, the address of which is http://www.sec.gov. Reports, proxy statements and other information concerning the Company also may be inspected at the offices of the CodeNew York Stock Exchange, which is located at 20 Broad Street, New York, New York 10005.
OTHER MATTERS ARISING AT THE SPECIAL MEETING
The matters referred to in the Notice of Ethics-EmployeesSpecial Meeting and described in this proxy statement are, to the knowledge of our Board, the only matters that will be presented for executive officers may be made onlyconsideration at the Special Meeting. If any other matters should properly come before the Special Meeting, the persons appointed by the Board or a Board committeeaccompanying proxy will vote on such matters in accordance with their best judgment pursuant to which the Board has delegated thatdiscretionary authority andgranted to them in the proxy.
The cost of solicitation of proxies will be promptly disclosed to our stockholders as required by applicable United States federal securities laws and the corporate governance rules of the NYSE. Amendments to the Code of Ethics-Employees must be approvedborne by the BoardCompany, and in addition to soliciting stockholders by mail through its regular employees, we may request banks, brokers and other custodians, nominees and fiduciaries to solicit their customers who have ICD common stock registered in the names of a nominee and, if so, will be promptly disclosed (other than technical, administrative or non-substantive changes) on our website.
DELIVERY OF DOCUMENTS TO STOCKHOLDERS SHARING AN ADDRESS
In some cases, only one copy of the Codeproxy statement is being delivered to multiple stockholders sharing an address. However, this delivery method, called “householding,” is not being used if we have received contrary instructions from one or more of Ethics
Time Period | Performance Units Vesting | Full Value RS/RSUs Issued(1) | Total Adjusted Awards(2) | Weighted Average Shares Outstanding | Burn-Rate | |||||
Fiscal 2018 | 162,938 | 1,153,848 | 1,975,179 | 47,580,000 | 4.15% | |||||
Fiscal 2017 | 80,752 | 489,862 | 855,921 | 37,762,000 | 2.27% | |||||
Fiscal 2016 | 46,677 | 747,500 | 1,191,266 | 33,118,000 | 3.60% | |||||
Three Year Average Burn-Rate | 3.40% |
Name | Unvested Time-Based Restricted Stock-Based Units (“RSUs”)(#) | Unvested Performance-Based RSU(#)s(1) | ||||
J. Anthony Gallegos, Jr. | 205,000 | 205,000 | ||||
Philip A. Choyce | 75,686 | 75,686 | ||||
Christopher K. Menefee | 31,857 | 31,858 | ||||
Executive Officers as a Group | 417,758 | 417,758 | ||||
Non-Employee Directors | 142,855 | — | ||||
All Employees Who are not Executive Officers | 52,001 | 52,001 |
Our Board knows of no PROPOSAL NO. 3RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORSInformation Regarding our Independent AuditorsThe Audit Committee of the Board has reappointed BDO USA, LLP (“BDO”) as independent auditors for 2019. Stockholders are being asked to vote upon the ratification of the appointment. Representatives of BDO will attend the Annual Meeting, where they will be available to respond to appropriate questions and have the opportunity to make a statement if they desire.Vote Required for ApprovalThe proposal to ratify the appointment of BDO as independent auditors will require approval of a majority of the votes cast at the Annual Meeting, in accordance with Section 1.7 of the Company’s Bylaws. In accordance with NYSE rules, a proposal to ratify independent auditors is considered to be a “discretionary” item. This means that brokerage firms may vote in their discretion on this matter on behalf of beneficial owners who have not furnished voting instructions within the time period specified in the voting instructions submitted by such brokerage firms. Abstentions will not be counted in votes cast and therefore will not have any effect on the proposal. Your shares will be voted as you specify on your proxy. If your properly executed proxy does not specify how you want your shares voted, we will vote them for the ratification of the appointment of BDO as independent auditors.THE BOARD RECOMMENDS A VOTE “FOR” THEPROPOSAL TO RATIFY THE APPOINTMENT OF BDOAudit and Other Fee InformationSet forth below is a summary of certain fees paid to BDO for services related to each of the fiscal years ended December 31, 2018 and 2017. Year Ended December 31, 2018 2017 $ 521,700 $ 313,566 Audit-Related Fees — — Tax Fees — — All Other Fees — — Total $ 521,700 $ 313,566 ____________(1)“Audit Fees” consisted of amounts incurred for services performed in association with our annual financial statement audit, review of financial statements included in our Quarterly Reports on Form 10-Q, the filing of our registration statements, the filing of our proxy statement and S-3 shelf registration statement in connection with the Sidewinder Merger and other services normally provided by the Company’s independent registered public accounting firm in connection with regulatory filings for the fiscal years shown.Policy on Audit Committee Pre-Approval of Audit and Non-Audit ServicesThe charter of the Audit Committee requires that the Audit Committee pre-approve all audit services and, subject to any applicable exceptions, any permissible non-audit services to be performed for the Company by BDO. The Audit Committee may delegate this authority to one or more members of the Audit Committee and such delegate(s) must present their pre-approval decisions to the Audit Committee at its next meeting. The charter of the Audit Committee also requires that the Audit Committee confirm that BDO is not engaged to perform any of the non-audit services set forth in an exhibit to the Audit Committee charter. The Audit Committee pre-approved 100% of the services described above opposite the caption “Audit Fees.” No fees were incurred or paid to BDO for “Audit-Related Fees”, “Tax Fees” and “Other Fees.”REPORT OF THE AUDIT COMMITTEEThe information contained in this Audit Committee Report and references in this Proxy Statement to the independence of the Audit Committee members shall not be deemed to be “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act or the Exchange Act, except to the extent that the Company specifically incorporates such information by reference in such filing.The Audit Committee’s role in the Company’s corporate governance is summarized under the caption “Information About the Board and its Committees — Committees of The Board” beginning on page 15 of this Proxy Statement. The Audit Committee’s role with respect to the Company’s financial reporting process is set out in this report.The Board of Directors appointed the undersigned directors as members of the Audit Committee and adopted a written charter setting forth the procedures and responsibilities of the committee. Each year, the Audit Committee reviews the charter and reports to the Board of Directors on its adequacy in light of applicable NYSE rules. In addition, the Company furnishes an annual written affirmation to the NYSE relating to Audit Committee membership, the independence and financial management expertise of the Audit Committee and the adequacy of the committee charter.The Audit Committee is directly responsible for the appointment, compensation, retention and oversight of the independent public accounting firm retained to audit the Company’s financial statements. The Audit Committee has appointed BDO USA, LLP as the Company’s independent auditors for fiscal year 2019 (and the Audit Committee is seeking ratification by the Company’s stockholders for this appointment at this Annual Meeting).During the last year, and earlier this year in preparation for the filing with the SEC of the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 (the “10-K”), the Audit Committee:reviewed and discussed the audited financial statements with management and the Company’s independent auditors;reviewed the overall scope and plans for the audit and the results of the independent auditors' examination;met with management periodically during the year to consider the adequacy of the Company’s internal controls and the quality of its financial reporting and discussed these matters with the Company’s independent auditor and with appropriate Company financial and compliance personnel;discussed with the Company’s senior management, independent auditor and the Company’s internal auditor the process used for the Company’s Chief Executive Officer and Chief Financial Officer to make the certifications required by the SEC and the Sarbanes-Oxley Act of 2002 in connection with the 10-K and other periodic filings with the SEC;reviewed and discussed with the independent auditor (1) their judgments as to the quality (and not just the acceptability) of the Company’s accounting policies, (2) the written disclosures and the letter required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent registered public accounting firm’s communications with the Audit Committee concerning independence, (3) the independent auditor’s independence, and (4) the matters required to be discussed with the Audit Committee under the Public Company Accounting Oversight Board applicable Auditing Standard 1301, “Communications with Audit Committees”; andbased on these reviews and discussions, as well as private discussions conducted in executive sessions without management present with the independent auditors and the Company’s internal auditors, recommended to the Board of Directors the inclusion of the audited financial statements of the Company in the 10-K.Notwithstanding the foregoing actions and the responsibilities set forth in the Audit Committee charter, the charter clarifies that it is not the duty of the Audit Committee to plan or conduct audits or to determine that the Company’s financial statements are complete and accurate and in accordance with generally accepted accounting principles. Management is responsible for the Company’s financial reporting process including its system of internal controls, and for the preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States. The independent registered public accounting firm is responsible for expressing an opinion on those financial statements. Audit Committee members are not employees of the Company or accountants or auditors by profession. Therefore, the committee has relied on management’s representation that the financial statements have been prepared with integrity and objectivity and in conformity with accounting principles generally accepted in the United States, that the Company’s internal controls over financial reporting were effective as of December 31, 2018 and on the representations of the independent registered public accounting firm included in their report on the Company’s financial statements.The Audit Committee held four meetings in 2018 and met regularly with management and the independent and internal auditors, including private discussions conducted with the independent auditors and the Company’s internal auditors and receivedthe communications described above. The Audit Committee has also established procedures for (1) the receipt, retention, investigation and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters, and (2) the confidential, anonymous submission by the Company’s employees of concerns regarding questionable accounting or auditing matters. However, this oversight does not provide us with an independent basis to determine that management has maintained appropriate accounting and financial reporting principles or policies, or appropriate internal controls and procedures designed to assure compliance with accounting standards and applicable laws and regulations. Furthermore, our considerations and discussions with management and the independent auditors and internal auditors do not assure that the Company’s financial statements are presented in accordance with generally accepted accounting principles or that the audit of the Company’s financial statements has been carried out in accordance with generally accepted auditing standards.Respectfully submitted by the Audit Committee of the Board of Directors of Independence Contract Drilling, Inc.Matthew D. Fitzgerald (Chairman)Thomas R. Bates, Jr.Daniel F. McNeaseSTOCK OWNERSHIP INFORMATIONSection 16(a) Beneficial Ownership Reporting ComplianceSection 16(a) of the Exchange Act requires our directors, executive officers and persons who beneficially own more than 10% of our outstanding common stock to file initial reports of ownership and changes in ownership of common stock with the Securities and Exchange Commission. Reporting persons are required by the Securities and Exchange Commission to furnish us with copies of all Section 16(a) forms they file. Based solely on our review of the copies of reports we received and the written representations from our directors and officers, we believe that all filings required to be made under Section 16(a) were timely made for the fiscal year ended December 31, 2018.Securities Authorized for Issuance Under Our Equity Compensation PlanThe following sets forth certain information regarding our equity compensation plan as of December 31, 2018. Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in Column (A)) Plan Category (A) (B) (C) 669,213 $12.74 — Equity compensation plans not approved by security holders — — — Total 669,213 $12.74 — ____________(1)Represents our 2012 Omnibus Plan. For additional information, see “Executive Compensation—2012 Omnibus Plan.” Pursuant to the terms of the adoption of the 2019 Omnibus Plan, no further grants will be made under the 2012 Omnibus Plan.”Security Ownership of Certain Beneficial Owners and ManagementThe following table sets forth information, as of April 15, 2019, for: (1) each person known by us to beneficially own more than 5% of our common stock; (2) each of our directors and director nominees; (3) each of our NEOs, as such term is defined by the SEC (“NEOs”); and (4) all directors and executive officers as a group.Footnote 1 to the following table provides a brief explanation of what is meant by the term “beneficial ownership.” The number of shares beneficially owned, the shares acquirable within 60 days and the percentages of beneficial ownership are based on 77,078,252 shares of common stock outstanding as of April 15, 2019, the number of shares owned on April 15, 2019 and the number of shares acquirable within 60 days of April 15, 2019 by the named person assuming no other person exercised options, with the exception of the amounts reported in filings on Schedule 13G or 13D, which amounts are based on holdings as of December 31, 2018, or as otherwise disclosed in such filings or the footnotes below.To our knowledge and except as indicated in the footnotes to this table and subject to applicable community property laws, the persons named in this table have the sole voting power with respect to all shares of common stock listed as beneficially owned by them. Total Percent of Common Stock Beneficially Owned 5% Stockholders: 4,471,800 — 4,471,800 5.8 % 18,825,212 — 18,825,212 24.4 % 4,046,591 — 4,046,591 5.2 % 4,252,659 — 4,252,659 5.5 % Directors and Named Executive Officers: 126,110 — 126,110 * 395,122 — 395,122 * 44,634 — 44,634 * 72,606 — 72,606 * 77,080 — 77,080 * 17,000 — 17,000 * — — — * 580,733 157,000 737,733 1.0 % 340,793 58,875 399,668 * 923,514 400,350 1,323,864 1.7 % 2,162,483 215,875 2,378,358 3.1 % ____________* Less than 1%.(1)“Beneficial ownership” is a term broadly defined by the SEC in Rule 13d-3 under the Exchange Act and includes more than the typical forms of stock ownership, that is, stock held in the person’s name. The term also includes what is referred to as “indirect ownership” meaning ownership of shares as to which a person has or shares investment or voting power, or a person who, through a trust or proxy, prevents the person from having beneficial ownership.(2)The address for each Named Executive Officer and director set forth in the table, unless otherwise indicated, is c/o Independence Contract Drilling, Inc., 20475 State Highway 249, Suite 300, Houston, Texas 77070.(3)Amounts shown include common stock and restricted stock awards beneficially owned as of April 15, 2019, except for the amounts reported in filings on Schedule 13G or 13D, which amounts are based on holdings as of December 31, 2018, or as otherwise disclosed in such filings. Unvested restricted stock units that have been granted have been excluded from this figure but have been summarized in the footnotes to this table.(4)Reflects the number of shares that could be purchased upon the exercise of options, warrants or other right of conversion held by the named person as of April 15, 2019 or within 60 days of April 15, 2019.(5)As reported on Schedule 13D as of October 1, 2018, as filed by MSD Capital, L.P. with the SEC on October 3, 2018. MSD Energy Investments, L.P. is the record and direct beneficial owner of the shares. MSD Capital, L.P. is the general partner of, and may be deemed to beneficially own securities beneficially owned by MSD Energy Investments, L.P. MSD Capital Management, LLC is the general partner of, and may be deemed to beneficially own securities beneficially owned by, MSD Capital, L.P. Each of Glenn R. Fuhrman, John C. Phelan and Marc R. Lisker is a manager of, and may be deemed to beneficially own securities beneficially owned by MSD Capital Management, LLC. Michael S. Dell is the controlling member of MSD Capital Management, LLC and may be deemed to beneficially own securities beneficially owned by MSD Capital Management, LLC. MSD Capital’s address is 645 Fifth Avenue, 21st Floor, New York, New York 10022.(6)As reported on Schedule 13D as of October 1, 2018, as filed by MSD Partners, L.P. with the SEC on October 3, 2018 and based upon Form 4 filed with the SEC on March 26, 2019. MSD Credit Opportunity Master Fund, L.P. is the record and direct beneficial owner of the shares. MSD Partners, L.P. is the manager of, and may be deemed to beneficially own securities beneficially owned by, MSD Credit Opportunity Master Fund, L.P. MSD Partners (GP), LLC is the general partner of, andmay be deemed to beneficially own securities beneficially owned by, MSD Partners, L.P. Each of Glenn R. Fuhrman, John C. Phelan and Marc R. Lisker is a manager of, and may be deemed to beneficially own securities beneficially owned by, MSD Partners (GP), LLC. MSD Partner's address is 645 Fifth Avenue, 21st Floor, New York, New York 10022.(7)As reported on Schedule 13G as filed with the SEC on April 16, 2019. Anthem's address is 220 Virginia Avenue, Indianapolis, Indiana 46204.(8)As reported on Schedule 13G as of October 1, 2018, as filed by Birch Grove Capital, LP with the SEC on October 11, 2018. Birch Grove Capital LP (“Birch Grove”) is a registered investment advisor that serves as the investment manager for Birch Grove Credit Strategies Master Fund LP (the “Master Fund”) and other managed accounts. BGCSMF-01 LLC is a Delaware limited liability company that owns the shares on behalf of the Master Fund. BGCSMF-01 LLC owns 4,176,194 shares in the Company representing 5.5% of our outstanding common stock. Birch Grove Capital Management LLC (“Birch Grove Capital Management”) is the general partner of Birch Grove. Birch Grove Advisors LLC is the general partner of the Master Fund, and Jonathan I. Berger, manager of Birch Grove Advisors LLC and Birch Grove Capital Management, is the natural person who may be deemed to have voting, investment and/or dispositive power with respect to the equity securities listed in the preceding table held by Birch Grove. Birch Grove's address is 660 Madison Avenue, 15th Floor, New York, New York 10065.(9)Excludes 28,571 shares underlying restricted stock units that will not vest until February 27, 2020.(10) Includes 395,122 shares of restricted stock that vest ratably in 1/3 increments on each of December 26, 2021, December 26. 2022 and December 26, 2023. Excludes (i) 235,765 shares of common stock underlying restricted stock units that vest ratably in 1/3 increments on October 1, 2019, October 1, 2020 and October 1, 2021; (ii) 205,000 shares of common stock underlying restricted stock units that vest ratably in 1/3 increments on February 27, 2020, February 27, 2021 and February 27, 2022; and (iii) 205,000 shares underlying performance restricted stock units that will not vest until February 27, 2022 based upon achievement of certain performance measures.(11)Excludes 28,571 shares underlying restricted stock units that will not vest until February 27, 2020.(12) Excludes 28,571 shares underlying restricted stock units that will not vest until February 27, 2020.(13) Excludes 28,571 shares underlying restricted stock units that will not vest until February 27, 2020.(14) Excludes (i) 28,571 shares underlying restricted stock units that will not vest until February 27, 2020 and (ii) 21,231 shares underlying restricted stock units that vest ratably on October 1, 2019, October 1, 2020 and October 1, 2021.(15) Mr. Piekarski is a principal with MSD Capital Partners L.P. He disclaims any beneficial ownership of any shares deemed to be beneficially owned by MSD Capital Partners L.P.(16)Shares acquirable within 60 days include options to purchase 150,000 shares of common stock that are exercisable within 60 days of April 15, 2019. Includes 243,902 shares of restricted stock that vest ratably in 1/3 increments on each of December 26, 2021, December 26, 2022 and December 26, 2023. Excludes (i) 75,686 shares of common stock underlying restricted stock units that vest ratably in 1/3 increments on February 27, 2020, February 27, 2021 and February 27, 2022; and (iii) 75,686 shares underlying performance restricted stock units that will not vest until February 27, 2022 based upon achievement of certain performance measures.(17) Includes 213,414 shares of restricted stock that vest ratably in 1/3 increments on each of December 26, 2021, December 26, 2022 and December 26, 2023. Excludes (i) 31,857 shares of common stock underlying restricted stock units that vest ratably in 1/3 increments on February 27, 2020, February 27, 2021 and February 27, 2022; and (iii) 31,858 shares underlying performance restricted stock units that will not vest until February 27, 2022 based upon achievement of certain performance measures.(18)Shares acquirable within 60 days include options to purchase 400,350 shares of common stock that are exercisable within 60 days of April 15, 2019.(19) Shares acquirable within 60 days includes options to purchase 215,875 shares of common stock that are exercisable within 60 days of April 15, 2019.EXECUTIVE OFFICERSOur executive officers serve at the discretion of the Board. The following table sets forth certain information as of the date of this Proxy Statement regarding our executive officers:NameAgePositionJ. Anthony Gallegos, Jr.49President and Chief Executive OfficerPhilip A. Choyce52Executive Vice President and Chief Financial OfficerTravis G. Fitts60Senior Vice President - HR & HS&EChristopher K. Menefee42Senior Vice President - Business DevelopmentPhilip A. Dalrymple39Vice President Operations - EastMichael J. Harwell50Vice President - Finance and Chief Accounting OfficerThere are no family relationships among any of our directors and executive officers.The following biographies describe the business experience of our executive officers.J. Anthony Gallegos, Jr., Director, President and Chief Executive Officer. See Mr. Gallegos’ biography included on page 9 of this Proxy Statement.Philip A. Choyce, Executive Vice President and Chief Financial Officer. Mr. Choyce is one of our original founders and has served as our Executive Vice President and Chief Financial Officer since August 2016, as our Senior Vice President and Chief Financial Officer from March 2012 to August 2016, and as our Senior Vice President and General Counsel from November 2011 until March 2012. From 2009 until 2011, Mr. Choyce was the owner of The Choyce Firm, which provided legal services to domestic and international oil and gas services companies. Mr. Choyce served as the Vice President, General Counsel, Corporate Secretary and Chief Compliance Officer of Grant Prideco, Inc., one of the world’s largest suppliers of drill pipe and drill bits, from its spinoff into a new public company in 2000 until its sale to National Oilwell Varco in 2008. Prior to joining Grant Prideco, Mr. Choyce was a Senior Associate at Fulbright & Jaworski LLP. Mr. Choyce began his career as a certified public accountant at Ernst & Young LLP. Mr. Choyce graduated from Texas A&M University with a B.B.A. in Accounting, and received his law degree from the University of Texas in Austin.Travis G. Fitts, Jr., Senior Vice President - HR & HS&E. Mr. Fitts has served as our Senior Vice President, HR & HS&E since the completion of the Sidewinder Merger in October 2018. From June 2011 until joining us, Mr. Fitts served as Senior Vice President - HS&E, HR & IT at Sidewinder. Prior to joining Sidewinder, Mr. Fitts served as Vice President HR/HSE for Scorpion Offshore from March 2006 to December 2010 and as Vice President HR/HSE for Select Energy Services from January 2011 to May 2011. Prior to joining Scorpion Offshore, Mr. Fitts worked for Transocean as Director of Human Resources; Director of Quality, Health, Safety & Environment; and Marketing Manager. Mr. Fitts began his career as an engineer and spent several years in operations. Mr. Fitts received a B.S. in Mineral Engineering from the University of Alabama and earned an MBA from Rice University. Mr. Fitts is a former Chairman of the Petroleum Section of the National Safety Council and currently serves on the board of Directors of Southern Federal Credit Union.Christopher K. Menefee, Senior Vice President - Business Development. Mr. Menefee has served as our Senior Vice President - Business Development since October 2018, and as Vice President - Business Development from March 2012 until October 2018. Mr. Menefee began his oilfield career in 1997 at Rowan Companies, Inc. In 2001, Mr. Menefee transferred from the United States Gulf of Mexico to Rowan’s Land Division where he held field operational roles and was the Health and Safety Manager. Mr. Menefee moved to Rowan’s corporate headquarters as the Director of Marketing in 2006. In this role, he was responsible for the marketing, sales and contracting of Rowan’s domestic and international rig fleet. Mr. Menefee graduated from The University of Mississippi in Oxford with a B.A. in Psychology. He also holds a graduate certificate in corporate finance from the Cox School of Business at Southern Methodist University. He is a Director of the International Association of Drilling Contractors and is a former Chairman of the IADC Houston Chapter.Philip A. Dalrymple, Vice President Operations - East. Mr. Dalrymple has served as our Vice President Operations - East since October 2018, and as our Vice President Operations from August 2016 until October 2018. Mr. Dalrymple joined us in January 2013, serving in increasing roles of responsibility, including Drilling Superintendent from January 2013 until October 2013 and Operations Manager from November 2013 until his promotion to Vice President - Operations in August 2016. Prior to joining us, Mr. Dalrymple was employed at Rowan Companies, most recently as lead project engineer overseeing construction of offshore drilling rigs from 2010 until 2013. From 2000 until 2010, Mr. Dalrymple served in increasing roles of responsibility in Rowan’s drilling operations, including rig manager and safety specialist. Mr. Dalrymple earned a B.S. in Mechanical Engineering Technologies from Texas A&M University - College Station.Michael J. Harwell, Vice President - Finance and Chief Accounting Officer. Mr. Harwell has served as our Vice President - Finance and Chief Accounting Officer since August 2012. Prior to joining us, Mr. Harwell served from 2005 to 2012 as the Vice President and Corporate Controller for Landry’s, Inc. (“Landry’s”), a restaurant, gaming and entertainment company. Prior to joining Landry’s, Mr. Harwell served as Vice President and Corporate Controller for NetVersant Solutions, Inc., a Houston based start-up company specializing in high-end network infrastructure projects. Mr. Harwell also held various positions with Nabors Industries, Ltd., a publicly traded drilling contractor, the most recent of which was Corporate Controller. After graduating from Texas A&M University with a B.B.A. in Accounting, Mr. Harwell, a certified public accountant, joined Ernst & Young LLP and remained with the accounting firm until 1994.COMPENSATION DISCUSSION AND ANALYSIS (CD&A)This Compensation Discussion and Analysis (“CD&A”) is designed to provide you with a better understanding of our compensation philosophy and how our Compensation Committee makes decisions regarding compensation for our executive officers named in the Summary Compensation Table on page 51 of this Proxy Statement.Status as an Emerging Growth CompanyWe are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012. As such, we have elected to comply with certain reduced public company reporting and other requirements, including reduced disclosures regarding executive compensation related matters. However, we have elected to include this CD&A in this Proxy Statement to permit you to better understand and evaluate our compensation policies and practices.Company Overview and Sidewinder MergerWe are a United States-based land contract driller, geographically focused in our target markets of Texas and its contiguous states. Our operations were dramatically impacted by the significant and prolonged industry downturn that began in late 2014 and continued throughout 2015 and 2016, with a modest recovery beginning in 2017 and continuing through most of 2018. During this period, the United States land rig count fell from 1,914 rigs in August 2014, the date of the Company’s initial public offering, to a low of 404 in May 2016 and slowly recovered to a high of 1,083 rigs in December 2018, in each case based on the Baker Hughes rig count.The following chart summarizes the Company’s operating revenues and adjusted EBITDA compared to the overall United States land-based average rig count during this period.As a result of this unprecedented industry downturn, the Company’s strategic focus shifted from growth to preservation and maintenance of organizational value. This strategic focus resulted in the Company’s shareholder returns generally exceeding our performance peer group of companies’ mid-point during this period, as set forth in the following table:Three Years Ended12/31/18Two Years Ended12/31/18One Year Ended12/31/18HPHPTDG(1)RESRESICDTDG(1)TDG(1)HPPTENICDPDSICDPTENPTENPESPDSRESPDSSPNPESNBRPESSPNSPNNBRNBRBAS(2)BAS(2)BAS(2)CJES(2)CJES(2)CJES(2)_____________________________(1)Calculated in Canadian dollars with regard to exchange rate changes versus the United States dollar.(2)Both Basic Energy Services, Inc. (“BAS”) and C&J Energy Services, Inc. (“CJES”) were included in the Company’s peer group during periods prior to 2017. BAS filed voluntary petitions for reorganization under Chapter 11 of the United States Code (the “Bankruptcy Code”) on October 25, 2016, and emerged from Chapter 11 as a reorganized company under a prepackaged Chapter 11 plan or reorganization effective on December 23, 2016. CJES filed voluntary petitions for reorganization under Chapter 11 of the Bankruptcy Code on July 20, 2016 and emerged from Chapter 11 as a reorganized company under a Chapter 11 plan of reorganization effective on January 6, 2017. Both BAS and CJES were replaced by Superior Energy Services, Inc. and RPC, Inc. in the Company’s peer group for performance periods beginning after 2016.In addition, the Board began a strategic review process in the summer of 2017 that ultimately ended in the Company’s merger with Sidewinder Drilling following approval by the Company’s stockholders at a Special Meeting held on October 1, 2018. In connection with the Sidewinder Merger, the Company issued 36,752,657 shares of the Company’s common stock, representing approximately 49% of the Company’s outstanding shares following the merger. The Sidewinder Merger created a step-change in the Company’s operational and financial scale, more than doubling the size of the Company’s drilling fleet, enhancing the Company’s financial footing and liquidity profile, creating financial synergies and presenting new opportunities for organic growth in free cash flow and returns.CEO Transition and Executive Compensation Matters Resulting from the Sidewinder MergerActive negotiations relating to the Sidewinder Merger began in December 2017. During these negotiations, representatives of Sidewinder contacted our Chairman of the Board, Thomas R. Bates, Jr. in April 2018 expressing their desire that J. Anthony Gallegos, Jr., the President and Chief Executive Officer of Sidewinder at the time, be appointed Chief Executive Officer of the Company upon completion of the strategic combination. Following this request, Mr. Bates separately discussed with Mr. Byron Dunn, the Company’s President and Chief Executive Officer at the time, the potential for Mr. Gallegos to serve as chief executive officer of the combined company upon completion of the merger. Mr. Dunn informed Mr. Bates that he would not oppose such a change if the Board concluded that a combination with Sidewinder was in the best interests of the Company’s stockholders. During April and May of 2018, each member of our Board of Directors met with Mr. Gallegos, and inquired about Mr. Gallegos’ background, experience and strategic view of the contract drilling industry and Mr. Gallegos’ proposed direction for the Company following a strategic combination with Sidewinder. Following these meetings, our Board of Directors determined to appoint Mr. Gallegos as President and Chief Executive Officer of the Company upon completion of the Sidewinder Merger.The definitive agreements governing the Sidewinder Merger were signed on July 19, 2018 and the merger was completed following approval by our stockholders at a special meeting held October 1, 2018. More than 99% of our stockholders represented by person or proxy at the special meeting voted in favor of the Sidewinder Merger. Mr. Gallegos succeeded Mr. Dunn as our President and Chief Executive Officer upon completion of the merger.Mr. Gallegos’ CompensationIn connection with Mr. Gallegos’ appointment as our Chief Executive Officer and surrender of his existing Sidewinder employment agreement, our Compensation Committee reviewed and approved the appropriate level of compensation for Mr. Gallegos as well as the terms of his replacement employment agreement with the Company. In making these determinations, the Compensation Committee utilized compensation and benchmark data and information compiled by our compensation consultants PM&P as well as their views on standard practices associated with the initial hire of a new chief executive officer. The Compensation Committee also considered its intention to set overall compensation at the median level of peer benchmark data prepared by PM&P, and considered the fact that Mr. Gallegos was not receiving any shares of the Company’s common stock in connection with the consummation of the Sidewinder Merger. Based upon this analysis, Mr. Gallegos was provided the following compensation package in connection with the Sidewinder Merger:An employment agreement more fully described under “—Employment and Change of Control Agreements” beginning on page 48 of this Proxy Statement.An initial base salary of $425,000 per year, which fell below the market median of $529,000 for the Company’s peer group based upon compensation benchmark data provided by Pearl Meyer.A target annual incentive bonus percentage of 100% of base salary, which compared to a market median of 95% for the Company’s peer group based upon compensation benchmark data provided by Pearl Meyer.A prorated annual bonus for the fourth quarter of 2018, based upon the objective corporate measures previously established for the Company for fiscal 2018.Stock-based awards with an aggregate value on the date of grant as reflected in the Summary Compensation Table on page 51 of this Proxy Statement of $2,382,746. In determining the level and composition of these initial stock-based awards, the Compensation Committee considered compensation benchmark data provided by PM&P and PM&P’s views regarding standard practices for initial grants upon hiring of a Chief Executive Officer. Based upon these factors, the Composition Committee determined that an award up to 2.0 times the value of a typical annual award for the Chief Executive Officer would be appropriate, which based upon benchmark data available from PM&P, was approximately $2,474,000. The awards granted to Mr. Gallegos in connection with his becoming our President and Chief Executive consist of two types of awards. First, an award of 235,765 restricted stock units which vest in equal installments on the first, second and third anniversary of the date of grant with typical accelerated vesting provisions in the event of termination without cause, good reason or following a change of control. Second, an award of 395,122 shares of five-year restricted stock that vest in equal installments on the third, fourth and fifth anniversaries of the date of grant. Unlike typical chief executive officer stock awards, these five-year restricted stock awards do not provide for accelerated vesting upon termination of employment and specifically provide that they are immediately forfeited upon termination of employment for any reason other than following a change of control. The five-year awards also provide for double-trigger vesting upon a change of control. In determining the structure of Mr. Gallegos’ initial stock awards, the Compensation Committee considered the lack of performance conditions placed on the initial awards to Mr. Gallegos, but believes that the weighting of over 60% of such awards to the five-year restricted stock award with longer vesting periods, and which do not permit accelerated vesting upon termination of employment prior to vesting over this extended period, aligns Mr. Gallegos’ interests with the long-term interests of the Company’s stockholders and performance of the Company. The Compensation Committee also considered that 50% of Mr. Gallegos future stock-based compensation awards would be weighted 50% to performance-based awards.Stock Vesting and ForfeituresThe Sidewinder Merger was a significant transaction for the Company, resulting in the Company issuing 36,752,657 shares of the Company’s common stock, representing approximately 49% of the Company’s outstanding common stock following the merger. Due to the significance of this transaction, it resulted in the vesting of certain outstanding awards previously granted to participants under the 2012 Omnibus Plan and the forfeiture of various performance stock units. No awards were vested on a discretionary basis by the Compensation Committee. The following chart summarizes shares issued and forfeited by our named executive officers as a result of the Sidewinder Merger:Name Units Vesting Philip A. Choyce 181,811 856,330 116,239 547,486 Christopher K. Menefee 87,256 410,976 67,935 319,974 Byron A. Dunn 465,653 2,193,226 318,118 1,498,336 _____________________________(1)Based upon the closing price for our common stock on October 1, 2018, the date of consummation of the Sidewinder Merger.(2)Based upon maximum potential shares that could be issued upon satisfaction of all performance conditions. Target potential shares forfeited represent 50% of such amounts.Severance PaymentsAs a result of Mr. Dunn’s termination of employment, which was not for cause, and the magnitude of the Sidewinder Merger, Mr. Dunn was entitled to receive a cash severance payment under the terms of his employment contract aggregating $3,480,000. Under the terms of his employment agreement, Mr. Dunn is subject to a three-year non-compete agreement following his termination. These severance amounts were paid to Mr. Dunn on April 1, 2019. None of our other executives received a severance or other cash transaction payment as a result of the Sidewinder Merger.Other Executive AppointmentsIn addition to Mr. Gallegos’ appointment, we also retained three additional Sidewinder executive officers who were granted long-term incentive awards in exchange for the surrender and termination of their existing Sidewinder employment agreements, which resulted in a reduction in their annual target bonus levels and a reduction in potential severance payments following a termination of employment without cause. All awards granted to these executives were in the form of five-year restricted stock awards with terms identical to the five-year restricted stock awards granted to Mr. Gallegos.2019 AwardsFollowing the Sidewinder Merger, the Compensation Committee also reassessed various priorities associated with the structure of our executive compensation program. Overall, the Compensation Committee’s goal remains to set targeted total compensation for its executives generally at the median level of its compensation peer group, with 100% of annual incentive compensation tied to measurable performance-based conditions and 50% of all long-term stock-based awards tied to measurable performance conditions. To this end, the Compensation Committee has reallocated priorities associated with its long-term performance-based compensation, utilizing metrics such as relative TSR and absolute financial return, and removing operational performance conditions such as safety-based and utilization-based performance measures. Operational performance objectives will continue to be a component of annual incentive plan performance conditions. This re-prioritization is reflected in the structure of the annual long-term stock-based awards granted in 2019, which are summarized in more detail later in this CD&A.Influence of Say-on-Pay Results on Executive Compensation DecisionsAs an emerging growth company, we have not included Say-on-Pay as an agenda item at this Annual Meeting or at prior annual meetings since becoming a publicly traded company. Say-on-Pay proposals will be submitted to our stockholders at our 2020 Annual Meeting Stockholders when we will no longer be considered an emerging growth company. Nevertheless, we prioritize feedback from our stockholders and consider evaluations by proxy advisory firms when designing and implementing our compensation programs.In 2018, and due to the absence of a Say-on-Pay proposal on the agenda at the 2018 Annual Meeting, one proxy advisory firm, Institutional Shareholder Services (ISS), recommended against voting for directors who were members of our Compensation Committee. We believe this recommendation was based upon ISS’s view of the following: (1) the inclusion of outsized peers in the Company’s compensation peer group; and (2) a perceived pay-for-performance misalignment based upon (a) a desire for additional disclosure regarding achievement of management by objective (“MBO”) metrics that form part of the Company’s annual incentive plan, (b) increased weighting towards performance compensation and (c) a desire for additional disclosures regarding long-term incentive awards and increased weighting towards performance-based awards.Although each of our Compensation Committee members received affirmative votes from greater than 85% of the shares voted at the 2018 Annual Meeting, in reviewing our compensation program for 2018 and 2019, we actively considered growing sentiments among our shareholder base for compensation more directly aligned with financial returns as well as concerns identified by proxy advisory firms. We believe the following actions taken by us address many of these concerns and priorities:Increased Disclosure. We are voluntarily including this full CD&A disclosure in this Proxy Statement to provide additional disclosures regarding our compensation policies and decisions.Peer Group. ISS’s concern regarding our compensation peer group was based upon the peer group utilized by our Compensation Committee for making decisions prior to 2018. In 2017, and for purposes of making compensationdecisions in 2018 and beyond, our Compensation Committee, with the assistance of PM&P, reviewed the Company’s compensation peer group and removed a significant number of peers that would likely be considered out-sized. Peers eliminated from our compensation peer group included Patterson-UTI Energy, Drill-Quip, Basic Energy Services, Helix Energy Services, Inc., Newpark Resources, Inc., Callon Petroleum Company, and Tesco Corporation. As a result, as more fully described in this CD&A, we believe our peer group is appropriately sized, with our pro forma revenues following the Sidewinder Merger exceeding the median revenues of our revised compensation peer group.Increased weighting towards objective performance measures. ISS’s desire for increased weighting of long-term performance awards was based upon a 70% / 30% time-based / performance-based split utilized by us in years immediately following our initial public offering. We increased our weighting of performance-based awards in 2018, and as part of our review of executive compensation practices and upon the recommendation of PM&P, further increased the relative performance weighting in our long-term incentive plan such that annual equity awards made in 2019 and beyond will be based upon a 50% / 50% split between time and performance-based awards. In addition, for 2018 and in 2019, we have benchmarked safety-based performance measures in our incentive plans against industry benchmarks published by the International Association of Contract Drillers for the U.S. land contract drilling industry, which the Compensation Committee believes provides a more objective benchmark for performance.Shift Towards Returns-Based Performance Awards. For performance awards in 2019 and beyond, the Company has replaced safety-related and utilization-related awards, which are not financial-return based, with performance awards tied to absolute return on invested capital targets. As a result, 2019 long-term incentive compensation performance awards are split 50% between performance conditions based upon total shareholder return compared to our TSR peer group and 50% based upon performance conditions tied to absolute return on invested capital.Key Compensation Practices and PoliciesWe strive to align executive compensation with stockholder interests and to incorporate strong governance standards within our compensation program, including:Compensation Committee Independence. 100% of our Compensation Committee members are independent.Focus on performance-based compensation. We have steadily increased our use of performance-based compensation since our IPO. Our annual incentive awards are 100% performance based and for 2019 and beyond, 50% of the grant value of our annual long-term incentive awards are performance based.Minimum Vesting Periods. We have included a minimum vesting period of one year or more under every long-term incentive award granted under our existing incentive plan. Additionally, the 2019 Omnibus Plan expressly provides that all awards must have minimum one-year or more vesting periods, subject to certain de minimis exceptions.Anti-Hedging and Anti-Pledging Policies. Our Insider Trading Policy, which applies to all of our employees and directors, prohibits employees and directors from hedging and pledging our securities.Double Trigger Payments Upon Change of Control. All of our executive employment agreements and change of control agreements include double trigger change of control payment conditions.Clawback Policy. In addition to our overall clawback policy, all of our stock plans include specific clawback provisions permitting us to clawback annual and long-term incentive compensation in the event of certain financial misstatements or other situations constituting cause.No Excise or Tax Gross Ups. None of our executive compensation plans or agreements permit tax gross-ups.Executive perquisites. We do not provide significant perquisites to our executive officers.Stock Ownership Guidelines for Executive Officers and Directors. We maintain stock ownership guidelines for directors and executive officers. Our Chief Executive Officer is required to maintain stock ownership equal to 4X his annual compensation.Engagement of Independent Compensation Consultants. We engaged PM&P to assist us in measuring and evaluating our director and executive compensation programs.Burn-Rate Analysis. We regularly perform burn rate analysis under our stock plans.Stock Grant Practices. We do not reload, reprice or back-date stock options or grant stock options with an exercise price less than the fair market value on the date of grant.Realized PayA significant amount of our executive compensation program is tied to performance measures, as well as to the value of our stock price. As a result, the actual amount of compensation realized by our executive officers can differ substantially from both a timing and value perspective from the targeted value as well as the value reported in our summary compensation table. Thus, as our industry experienced significant declines in 2015 and 2016 and only modest recoveries in 2017 and 2018, the compensation realized by our executive officers has been well below the levels of target compensation we set for them as well as compensation levels disclosed in our summary compensation tables in our annual proxy statements. We believe our increased emphasis on performance-based compensation and financial-return based performance conditions will further increase alignment of our executive’s future realized pay with overall stock and financial returns.The table below illustrates “realized total compensation” for our Chief Executive Officer in contrast to the original target total compensation opportunity awarded during the past five fiscal years and compensation reported in our Summary Compensation Table on page 51 of this Proxy Statement and prior proxy statements. This illustrates the impact of the market downturn and how our executive compensation is aligned with stockholder interests. Realized Pay as a % Fiscal Year Summary Compensation Table Target Total Compensation 4,321,002 2,415,000 954,725 22% 40% 669,089 2,415,000 1,041,909 156% 43% 1,982,403 2,415,000 1,192,194 60% 49% 2,368,797 2,292,000 1,853,742 78% 81% 1,653,340 2,209,000 3,155,494 191% 143% Total 10,994,631 11,746,000 8,198,064 75% 70% (1)Total compensation for Byron Dunn, our Chief Executive Officer, from 2014 through October 2018, as reported on our Summary Compensation Table in this Proxy Statement as well as proxy statements for prior years.(2)Total target compensation for Mr. Dunn determined by our Compensation Committee based upon data prepared by our compensation consultants, PM&P.(3)Calculated as actual salary and bonus/annual incentive paid, plus the value of all stock vesting during the applicable fiscal year for Mr. Dunn. Restricted stock and performance award vesting was valued at the fair market value of our common stock on the date of vesting.(4)Fiscal 2014 includes long-term incentive awards granted on August 13, 2014, the date of completion of our initial public offering. No awards were granted in 2015 based upon the timing and magnitude of awards made upon completion of the initial public offering.(5)In light of the market downturn in 2016, the Compensation Committee elected to reduce award levels below target total compensation.(6)Includes $2,193,226 of compensation relating to the acceleration of vesting of stock awards in connection with the Sidewinder Merger and Mr. Dunn’s termination of employment upon closing of the transaction. Excludes $3,480,000 of cash severance payable to Mr. Dunn pursuant to the terms of his employment contract, including in connection with a three-year non-competition agreement.Burn-Rate AnalysisWe periodically perform burn-rate analysis on our stock grants to measure our burn-rate compared to industry standards such as those maintained by Institutional Shareholder Services. The following charts summarizes burn-rate information over the past three fiscal years and is derived directly from information contained in Note 10 to our Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2018, a copy of which is being sent to stockholders along with this Proxy Statement.Time Period Performance Units Vesting Weighted Average Shares Outstanding Burn-Rate Fiscal 2016 46,677 747,500 1,191,266 33,118,000 3.60% Fiscal 2017 80,752 489,862 855,921 37,762,000 2.27% Fiscal 2018 162,938 1,153,848 1,975,179 47,580,000 4.15% Three Year Average Burn-Rate 3.40% (1)Represents restricted stock units and restricted stock shares issued during applicable fiscal years. Excludes 409,607 restricted stock units and 646,646 restricted stock shares issued to former Sidewinder executive officers relating to their becoming officers of us following the Sidewinder Merger and termination of prior employment agreements.(2)Value of performance shares vesting and full value restricted stock and restricted stock unit awards granted applying the ISS assigned premium of 1.5x to full value awards granted.Determining Total Target CompensationOur executive compensation program is highly variable, and performance based. The primary components of our executive program are base salary and annual and long-term incentives. Consistent with this approach, our program features nominal levels of fixed compensation in the form of base salary for our executive officers named in our Summary Compensation Table on page 51 of this Proxy Statement (our “NEOs”), while annual and long-term incentives comprised approximately 80% of our Chief Executive Officer’s target compensation and 67% of our other NEOs. Our program is also heavily weighted towards variability of our stock price with the ultimate value of the long-term incentives (consisting of restricted stock units and performance stock units) depending on our stock price.At the Compensation Committee’s request, PM&P conducts an annual executive compensation review to benchmark the Company’s executive compensation relative to our Compensation Peer Group (defined below) with supplemental data from published market surveys. The Compensation Committee uses this report to evaluate whether the executive compensation levels, including base salary and actual incentive payouts, are within industry norms and the Company’s stated strategy.PM&P supplements data from the Compensation Peer Group with broad-based compensation survey data to develop a comprehensive view of the competitive market data. We believe using survey data is an important element of our compensation evaluation. Compensation survey data includes companies from the broader energy industry that influence the competitive market for executive talent. In addition, the survey data also includes data from companies that are comparable to us in terms of size and scale.When making total compensation decisions for our Chief Executive Officer and Chief Financial Officer, we seek to set target compensation at the median level compared to analysis performed by PM&P based upon a blend of our compensation peer group and survey data compiled by PM&P. For our other named executive officers, there is limited data available from our compensation peer group for benchmarking purposes, thus we seek to set target total compensation levels for these executives at the median level compared to survey data compiled by PM&P.The following charts illustrate the 2018 target mix of compensation elements for our Chief Executive Officer and other NEOs, with one-half of the long-term incentives being performance-based restricted stock units:How we make executive compensation decisionsCompensation CommitteeOur Compensation Committee determines our overall compensation philosophy, sets the compensation of our Chief Executive Officer and approves the compensation of our NEOs and other executive officers. In making compensation decisions, the Compensation Committee considers a variety of factors, including without limitation, our financial results, our strategic goals and accomplishments, the performance potential of our Chief Executive Officer and other executive officers, peer group compensation, survey data, overall compensation paid in prior years, the retention value of long-term compensation plans and the recommendations of our Chief Executive Officer. The Compensation Committee has the authority to retain compensation consultants, outside counsel or other advisors to assist the Compensation Committee in the discharge of its duties.Chief Executive OfficerOur Chief Executive Officer recommends the compensation of our executive officers, other than himself. Each year, the Chief Executive Officer makes recommendations to the Compensation Committee regarding salary adjustments, annual incentive compensation program payout multiples and long-term incentive grants to our other executive officers. In formulating his recommendations, the Chief Executive Officer considers various factors, including his subjective analysis of each executive’s performance and contributions to the Company, the performance of business units under his direct supervision (if applicable to the particular officer), experience level, tenure in position, the average base pay level for similar positions and the Company’s overall performance. Although the Compensation Committee considers the Chief Executive Officer’s recommendations with respect to other executive officers, the Compensation Committee makes all final determinations regarding executive compensation, including determining our Chief Executive Officer’s compensation.Compensation ConsultantsThe Compensation Committee has engaged PM&P as its independent executive compensation consultant since July 2014. PM&P advises the Compensation Committee on executive compensation matters and assists in developing and implementing our executive compensation program. We also discussed this CD&A with PM&P. As required by SEC and NYSE rules, the Compensation Committee has assessed the independence of PM&P and concluded that PM&P’s work did not raise any conflicts of interest during 2018. In making this determination, in addition to receiving an independence letter from PM&P, the Compensation Committee noted that during fiscal year 2018:PM&P provided advisory services related solely to executive and director compensation;Fees from the Company represented less than 1% of PM&P’s total revenue;PM&P maintains a conflicts policy to prevent a conflict of interest or any other independence issues;None of the team assigned to the Company had any business or personal relationship with members of the Compensation Committee outside of the engagement;None of the team assigned to the Company had any business or personal relationship with any of the Company’s executive officers outside of the engagement; andNone of the team assigned to the Company maintained any individual position in our common stock.Market DataPM&P uses compensation data gathered from our Compensation Peer Group as well as supplemental data from market surveys to benchmark our executive officer compensation. Our review of this data typically focuses on the main elements of executive officer compensation: base salary, annual incentive cash award opportunity, long-term compensation and total direct compensation. Although we review both target compensation and actual compensation paid, our focus is on target compensation, including the target amount of annual cash award opportunities, as it provides the best indication of competitive compensation levels for our executive officer.Peer Groups and BenchmarkingThe Compensation Committee evaluates the Company’s executive compensation practices and financial performance by reference to two different peer groups as described below. The performance peer group is comprised of U.S. land-based contract drillers and other oilfield service companies that were chosen due to similarity of services provided, operating footprint, business focus, and competitive conditions (the “Performance Peer Group”). The compensation peer group is a group of companies that would be considered peers for executive talent purposes based on a combination of factors, including size and industry (the “Compensation Peer Group”). The Compensation Peer Group is similar to the Company in terms of size and scope of operations, although, due to the limited number of companies directly similar in size, we include companies that are both somewhat smaller and larger than the Company. Additionally, we have excluded certain Performance Peer Group companies from the Compensation Peer Group because of dissimilarity in size.The Compensation Committee annually reviews the companies comprising each peer group and revises each group as it deems appropriate after consultation with PM&P. As previously discussed, the Compensation Committee removed outsized companies from its Compensation Peer Group in order to more closely align the peer group with our size. For 2018, the Compensation Committee utilized the following peer groups:Peer GroupPerformanceHelmerich & PayneNabors Industries, LtdPatterson-UTI, Inc.Precision Drilling, Inc. Pioneer Energy Services, Inc.Trinidad Drilling, Inc.Superior Energy Services, Inc.RPC, Inc.Compensation Trinidad Drilling LtdParker Drilling Company Inc.Pioneer Energy Services Corp.Flotek Industries, Inc.PHX Energy Services Corp.Gulf Island Fabrication, Inc.ION Geophysical Corporation Geospace Technologies CorporationNatural Gas Services Group, Inc.AKITA Drilling Ltd.Xtreme Drilling Corp.Panhandle Oil and Gas Inc.Enservco CorporationThe Compensation Peer Group set forth above had a trailing twelve-month median revenue of $224 million as of December 31, 2018. During 2018, our revenues were $143 million, and pro forma for the Sidewinder Merger that closed October 1, 2018, were $228 million.Components of Executive CompensationThe main components of our executive compensation program are base salary, our annual incentive compensation program and our long-term incentive program. Overall, the primary emphasis of our executive compensation program is to provide variable performance-based compensation that is at-risk, with a focus on our long-term performance. As an executive’s level of responsibility increases, a greater portion of total compensation is at-risk, creating the potential for greater variability in the individual’s compensation from year to year.Base SalaryThe primary role of the base salary element of our executive compensation program is to compensate executive officers for the experience, education, personal qualities and other qualifications that are key for their specific role within the Company. In establishing the base salaries for our executive officers, we have historically targeted the median salaries of similarly situated executive officers in the Company’s Compensation Peer Group and strive to set base salaries at consistent levels for positions with similar responsibilities.The Compensation Committee reviews relevant survey data and information and analysis provided by its compensation consultant, if one is retained for that year, or by management, if no compensation consultant is engaged, to ensure that our salary program is competitive. We believe that a competitive salary program and industry standard benefits are important factors in our ability to attract and retain executive officers. We generally compare base salaries paid to our executive officers to the median base salaries reflected in the survey data as a check for competitiveness. The Compensation Committee reviews the salaries of all our executive officers at least annually. Salaries may be adjusted for performance, which may include individual, business unit and/or company-wide performance, expansion of duties and responsibilities and changes in market salary levels.In considering salary adjustments, the Compensation Committee gives weight to the following factors: (1) corporate performance goals; (2) our Chief Executive Officer’s analysis of the individual’s performance and potential; and (3) our Chief Executive Officer’s specific compensation recommendations (except regarding his own salary). The Compensation Committee does not rely on formulas and considers all of the above factors when evaluating salary adjustments.No increases in base salary were awarded in 2018 to any of our named NEOs. The following chart sets forth annual base salaries for our NEOs as of December 31, 2018:NamePositionAnnual Salary($)J. Anthony Gallegos, Jr.President & Chief Executive Officer425,000Philip A. ChoyceExecutive Vice President & Chief Financial Officer319,000Christopher K. MenefeeSenior Vice President - Business Development250,000Mr. Gallegos annual salary was increased to $464,000 effective January 1, 2019, which the Compensation Committee determined was more closely aligned with the 50% level compared to data prepared by PM&P based upon our Compensation Peer Group and other survey data compiled by PM&P.Annual Incentive Compensation ProgramThe purpose of our annual incentive compensation program is to reward executive officers for achievement of annual financial and operational objectives. Although the Compensation Committee sets annual incentive target levels that result in median payouts when performance objectives are met, this program provides executive officers with the opportunity to earn higher payments depending on the extent to which these performance objectives are achieved or exceeded.The following chart summarizes the 2018 potential annual incentive opportunity for each of our NEOs shown as a percentage of base salary:Name Below Entry Target Over Achievement J. Anthony Gallegos, Jr. 0% 100% 200% Philip A. Choyce 0% 80% 160% Christopher K. Menefee 0% 60% 120% Byron A. Dunn 0% 120% 240% For performance achievements between the entry, target and over-achievement levels, the actual payout is calculated based upon interpolation.For 2018, we implemented an annual incentive compensation program tied to the following performance measures: 2018 Weighting Name Adjusted EBITDA Cost Per Day J. Anthony Gallegos, Jr. 15% 50% 15% 20% Philip A. Choyce 15% 50% 15% 20% Christopher K. Menefee 15% 50% 15% 20% Byron A. Dunn 15% 50% 15% 20% When establishing the performance targets for each criterion in 2018, the Compensation Committee reviewed 2017 performance and the 2018 annual budget approved by the Board of Directors. Based upon this review, the Compensation Committee increased the performance thresholds for Adjusted EBITDA and adjusted Cost Per Day performance metrics upward slightly due to increases in rig level pay implemented in response to a tightening labor market. With respect to Safety performance, the Compensation Committee changed the performance target to a measurement based upon published industry benchmarks maintained by the International Association of Drilling Contractors for U.S. land-based activities, which the Compensation Committee believed provided a more objective benchmark of performance.The threshold, target and over-achievement performance objectives and actual performance for each corporate objective measure for 2018 is set forth below: 2018 Criteria Bonus Criteria Entry Target Over Achievement Actual Performance 110% Industry Average Industry Average 90% Industry Average or below Payout (15% Weighting) Above = 0% 100% 200% 200% $14,582 $18,228 $21,873 or below Over Achievement: $24,128 Payout (50% Weighting) Below = 0% 100% 200% 200% $13,533 $13,133 $12,733 or below Payout (15% Weighting) Above = 0% 100% 200% 114% ____________(1)Total Recordable Incidence Rate (“TRIR”). Industry Average is based upon the International Association of Drilling Contractor’s published 2018 Incident Rate for United States Land-Based contract drilling activities.(2)Based upon the Company standalone performance. In determining actual performance, the Compensation Committee excluded Adjusted EBITDA attributable to the acquired Sidewinder operations.(3)Calculated as operating costs (excluding pass through costs and rig construction overhead) divided by revenue days during the period.Mr. Gallegos joined us effective October 1, 2018, and the Company did not establish specific MBO performance goals for Mr. Gallegos for the fourth quarter of 2018. Thus, the payment of the MBO portion of his annual incentive compensation payment was based upon the substantial progress the Company made towards realization of synergies and operational integration following the Sidewinder Merger, as opposed to performance against pre-established MBO performance goals. As a result, the MBO portion of Mr. Gallegos’ 2018 annual incentive award, representing $42,500, is reported in our Summary Compensation Table on page 51 of this Proxy Statement as a discretionary bonus award.For 2018, Mr. Dunn’s individual MBO performance goals related to (1) relocation and optimizing corporate and operational locations and roofline, (2) implementation of various procurement and on-boarding initiatives, (3) implementation of various training and safety initiatives and (4) review of strategic opportunities. Mr. Dunn left the Company upon consummation of the Sidewinder Merger, and we did not make any payments to him under our annual incentive compensation program during 2018 since he was not an employee at the end of the year.The following chart summarizes MBO objectives and performance achievement with respect to those objectives for each of Mr. Choyce and Mr. Menefee:ExecutiveObjectivePerformance AchievementPhilip A. Choyce(Over Achievement)Leading due diligence and financial analysis of potential merger and acquisition opportunities and alternative financing opportunities.Implementation of various initiatives regarding centralized purchasing and policy and procedures.Implementation of processes associated with streamlining on-boarding and payroll and benefits reporting.Mr. Choyce successfully led the analysis, negotiation and execution of the Sidewinder Merger and related financings.Mr. Choyce successfully led evaluation and implementation of our RigReq™ purchasing system following the Sidewinder Merger.Mr. Choyce successfully led implementation of new payroll and on-boarding software prior to the Sidewinder Merger.Christopher K. Menefee(Target Achievement)Achievement of industry leading dayrates and management of idle time between contracts.Obtaining term contracts for newbuild rigs.Negotiation and implementation of drilling optimization software with third-party providers.Review of strategic alternatives and assistance with merger and acquisition due diligence and review; analysis and communication of competitive and market forces.The Company’s average dayrate on contract renewals increased over $3,000 per day during 2018. Fleet utilization was 98% in 2018.The Company contracted one newbuild rig on a term contract during 2018.The Company continued and furthered negotiations with third parties towards use and implementation of drilling optimization software during 2018.Mr. Menefee was instrumental in the evaluation of the rig fleet acquired in the Sidewinder Merger.Payouts to Messrs. Gallegos, Choyce, and Menefee under our annual incentive compensation program in 2018 were as follows:Name Safety (TRIR) Metric($) Adjusted EBITDA($) Cost Per Day($) Total Annual Incentive Payment($) 31,875 106,250 18,169 — 42,500 198,794 Philip A. Choyce 76,560 255,200 43,639 102,080 — 477,479 Christopher K. Menefee 45,000 150,000 25,650 30,000 — 250,650 ____________________________(1)Mr. Gallegos joined us on October 1, 2018. Reported amounts exclude $1,134,004 of incentive compensation and transaction payments made to Mr. Gallegos for obligations assumed pursuant to the terms and conditions of the Sidewinder Merger.Long-Term IncentivesThe purpose of our long-term incentive program is to focus executive officers on long-term Company goals and performance and align their compensation with long-term stockholder returns. Under the 2018 long-term incentive program, the Compensation Committee granted 40% of the annual awards to our executive officers in the form of performance units and 60% in the form of restricted stock units. For 2019, 50% of annual awards to our executive officers are in the form of performance units and 50% are in the form of restricted stock units.Consistent with the Company’s compensation philosophy, the Compensation Committee believes stock-based incentive awards are one of the best ways to align our executive’s interests with those of our stockholders. In addition, the terms of the performance units reflect the Compensation Committee’s belief that executive compensation should be tied to Company performance. The performance units provide our executive officers the opportunity to earn additional compensation based on the Company’s performance.Upon closing of the Sidewinder Merger, we appointed Mr. Gallegos as our President and Chief Executive Officer, and also appointed three new officers who previously served as officers of Sidewinder. As previously discussed in this CD&A, in connection his appointment, we granted Mr. Gallegos 235,765 three-year time-based restricted stock units and 395,122 shares of five-year restricted stock that vest over an extended period of five years, with the first vesting opportunity not occurring until expiration of the third year. We also granted an aggregate of 373,475 shares of five-year restricted stock to the three new officers in connection with their appointments and the surrender and termination of their legacy employment agreements assumed in the Sidewinder Merger. In addition, we made grants of five-year restricted stock to Mr. Choyce and Mr. Menefee in connection with aligning their long-term interests with those of our stockholders. The five-year restricted stock shares are forfeited if the executive leaves employment of the Company for any reason and are subject to double-trigger vesting in the event of a change of control.The following table summarizes elements of our 2018 long-term incentive program for our NEO’s:2018 AWARDSComponent% of AwardTermsAlignmentRestricted Stock Units - Time Based60%Vest in equal annual installments over 3-year period, subject to continued service.Restricted stock unit awards provide full value shares to our executive officers which is key to retention and aligning interests with our stockholders; the ultimate value of these awards is dependent on stock price performance.TSR Performance Awards13.4%Three-year performance period with payout range of 0 (below 25th percentile), 100% (50th percentile) and 200% (above 75th percentile) based upon Company’s relative TSR versus peer group over a cumulative 1, 2 and 3-year period.Aligns interests with our stockholders and rewards out-performance compared to peer companies; the ultimate value of these awards is dependent on both (1) meeting the applicable performance measure and (2) stock price performance.Safety Performance Awards13.3%Three-year performance period. Safety performance is measured against IADC US land average total recordable incident rate in each of years 1, 2, and 3; payout = 0 (above 110% industry avg), 100% (equal industry avg) and 200% (below 90% industry avg).Aligns long-term compensation with a key operational measure that corresponds with improved operational and financial performance; the ultimate value of these awards is dependent on both (1) meeting the applicable performance measure and (2) stock price performance.Uptime Performance Awards13.3%Three-year performance period. Operational uptime performance is measured against absolute targets established by the Compensation Committee in each of years 1, 2 and 3; payout = 0 (below 99% target), 100% (target) and 200% (above 101% target).Aligns long-term compensation with a key operational measure that corresponds with improved operational and financial performance; the ultimate value of these awards is dependent on both (1) meeting the applicable performance measure and (2) stock price performance.Five-Year Restricted Stock AwardsN/AFive-year awards that vest in one-third increments beginning in 2021, 2022, and 2023 awarded in connection with appointment of new executive officers following the Sidewinder Merger and to certain other executive officers of the Company. No accelerated vesting upon termination of employment, except in connection with a change of control.Isolated one-time grants in connection with appointment of new officers in connection with the Sidewinder Merger and to certain other executive officers for retention purposes following the Sidewinder Merger; extended vesting period of five years ensures long-term alignment with stockholders. Removal of typical accelerated vesting protections upon employment termination further aligns executive compensation to executive performance; the ultimate value of these awards is dependent on stock price performance.As previously discussed above, following the Sidewinder Merger, the Compensation Committee reassessed various priorities associated with the structure of our executive compensation program. Given the transformational nature of the Sidewinder Merger, the Compensation Committee reassessed performance conditions associated with our long-term performance-based compensation, which resulted in a change to the performance conditions contained in our annualperformance awards. The Compensation Committee maintained its practice of tying 50% of long-term incentive awards to performance conditions, but replaced operational performance conditions with conditions tied to absolute financial metrics based upon return on invested capital (“ROIC”). This reprioritization is reflected in the structure of the annual long-term stock-based awards granted in 2019, which is summarized in the table below:2019 AWARDSComponent% of AwardTermsAlignmentRestricted Stock Units - Time Based50%Vest in equal annual installments over 3-year period, subject to continued service.Restricted stock unit awards provide full value shares to our executive officers which is key to retention and aligning interests with our stockholders; the ultimate value of these awards is dependent on stock price performance.TSR Performance Awards25%Three-year performance period with payout range of 0 (below 25th percentile), 100% (50th percentile) and 200% (above 75th percentile) based upon Company’s relative TSR versus peer group over a cumulative 1, 2 and 3-year period.Aligns interests with our stockholders and rewards for out-performance compared to peer companies; the ultimate value is based upon both (1) meeting the applicable performance measure and (2) stock price performance.ROICPerformance Awards25%Three-year performance period with payout range of 0 to 200% based upon Company’s ROIC in each of years 1, 2 and 3 measured against predetermined goals established by the Compensation Committee, with year-3 goals tied to achieving and exceeding the Company’s weighted average cost of capital.Aligns interests with our stockholders by rewarding returns-based decision making and actions; the ultimate value of these awards is dependent on both (1) meeting the applicable performance measure and (2) stock price performance.The following chart summarizes 2018 Long-Term Incentive Grants to each of our NEOs:Name Restricted Stock Units Performance-Based Restricted Stock Units Five-Year Restricted Stock Awards J. Anthony Gallegos, Jr.(1) 235,765 — 395,122 Philip A. Choyce 57,134 38,090 243,902 Christopher K. Menefee 43,049 28,700 213,414 Byron A. Dunn 172,332 114,488 — ____________________________(1) Represents awards made to Mr. Gallegos in connection with his appointment as President and Chief Executive Officer of the Company following completion of the Sidewinder Merger.Awards made to our NEOs in 2019, which awards remain subject to approval by the Company’s stockholders of the adoption of the 2019 Omnibus Plan at the Annual Meeting, are more fully summarized on page 25 of this Proxy Statement.Perquisites and Retirement BenefitsPerquisites are not a material component of our executive compensation. In general, NEOs are not compensated for and do not receive reimbursements for the private use of country clubs, meals, airline and travel costs other than those costs allowed for all employees, or for tickets to sporting events or entertainment events, unless such tickets are used for business purposes. We do reimburse Mr. Menefee for country club dues. Further, our NEOs do not receive compensation or reimbursements for hunting and fishing camp costs or home security expenses. During 2018, except for Mr. Menefee’s country club dues, no NEO received any compensation for or reimbursement of any of the foregoing costs or expenses incurred for non-business purposes.Executive Compensation PoliciesStock ownership guidelinesWe believe it is important that the interests of our executive officers and directors are aligned with the long-term interests of our stockholders. As such, we have adopted stock ownership guidelines applicable to the Company’s executive officers and directors to further align these interests and to further promote the Company’s commitment to sound corporate governance.A copy of our stock ownership guidelines is available on our website at http://icdrilling.investorroom.com/corporategovernance. These guidelines encourage our directors and executive officers to accumulate a certain amount of the Company's stock relative to such director's or executive officer's base compensation. Specifically, the stock ownership guidelines are calculated based on a multiple of the executive officer's base salary, or in the case of a director, a multiple of his base annual retainer. Each executive officer and director has five years to attain the targeted level of ownership following his initial appointment as an executive officer or his initial election as a director, as the case may be. For directors, the ownership guideline is three times the director’s base annual retainer. For executive officers, the ownership guidelines are as follows:PositionMultiplePresident and Chief Executive Officer4XSenior or Executive Vice President2XVice President1XShares of stock that count toward satisfying the stock ownership guidelines include (i) shares of the Company's stock beneficially owned, directly or indirectly, by the executive officer or director, and (ii) restricted shares and restricted stock units granted to the executive officer or director under the Company’s long-term incentive plan.Clawback policiesIt is the Company’s policy that any incentive-based compensation from 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, pursuant to the award agreement applicable to such incentive-based compensation, as may be required by law, government regulation or stock exchange listing requirement. Such clawbacks include, without limitation, the clawback requirements contained in Section 304 of the Sarbanes Oxley Act. Our corporate clawback policy adopted by our Board of Directors is available on our website at http://icdrilling.investorroom.com/code_of_conduct.Accounting for Stock-Based CompensationWe have followed FASB ASC Topic 718 in accounting for stock-based compensation awards. FASB ASC Topic 718 requires companies to calculate the grant date “fair value” of their stock-based awards using a variety of assumptions. FASB ASC Topic 718 also requires companies to recognize the compensation cost of their stock-based awards in their income statements over the period that an employee is required to render service in exchange for the award. We expect that we will regularly consider the accounting implications of significant compensation decisions, especially in connection with decisions that relate to our equity incentive award plans and programs. As accounting standards change, we may revise certain programs to appropriately align accounting expenses of our equity awards with our overall executive compensation philosophy and objectives.Employment and Change of Control AgreementsWe have entered into employment agreements with Messrs. Gallegos and Choyce. Under the terms of the employment agreements, Messrs. Gallegos and Choyce are paid annual salaries of $464,000 and $319,000, respectively, and are eligible to receive target bonuses, payable at the discretion of the Board equal to 100% and 80%, respectively, of their annual salaries. Each employment agreement is for a term of three years; provided, however, that if neither the Company nor the employee has provided written notice of termination at least one year prior to the scheduled expiration of the then current term of the agreement (the “renewal date”), the employment term automatically extends for one additional year, so as to expire two years from such renewal date.Mr. Gallegos is subject to a non-compete agreement restricting him from competing in the United States land contract drilling industry for a period of 24 months following termination of employment. Mr. Choyce is subject to a non-compete agreement restricting him from competing in the United States land contract drilling industry for a period of 12 months following termination of employment.Under their employment agreements, Messrs. Gallegos and Choyce are entitled to receive a severance payment in the event their employment is terminated by the Company without “cause” or by the executive for “good reason.” Such severance payments will be payable in a lump sum and will be equal to the following:all accrued and unpaid salary and prior fiscal year bonus earned but not paid as of the date of termination;a pro rata portion of the executive officer’s target bonus for the fiscal year in which termination of employment occurs; andtwo (2) times the sum of (i) the executive officer’s annual base salary in effect at the time of termination of employment and (ii) the executive officer’s target annual bonus.Under the employment agreements, “cause” is deemed to exist if any of the following occurs: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;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;misappropriation of funds or property of the Company or committing any fraud against the Company or against any other person or entity in the course of employment with the Company;misappropriation of any corporate opportunity, or otherwise obtaining personal profit from any transaction which is adverse to the interests of the Company or to the benefits of which the Company is entitled;conviction of a felony involving moral turpitudewillful failure to comply in any material respect with the terms of the employment agreement and such non-compliance continues uncured after thirty (30) days after written notice from the Company; orchronic substance abuse, including abuse of alcohol, drugs or other substances or use of illegal narcotics or substances, for which the executive officer 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 the executive officer’s duties and responsibilities.Under the employment agreements, “good reason” is deemed to exist if any of the following occurs:any action or inaction that constitutes a material breach by the Company of the employment agreement and such action or inaction continues uncured after thirty (30) days following written notice from the executive officer;the assignment to the executive officer of any duties inconsistent in any respect with the executive officer’s position (including status, offices, titles and reporting requirements), authority, duties or responsibilities as contemplated by the employment agreement, 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 30 days of receipt of written notice thereof given by the executive officer;any failure by the Company to comply with the payment provisions of the employment agreement, other than an isolated, insubstantial and inadvertent failure not occurring in bad faith and which is remedied by the Company as soon as reasonable possible, but no later than 30 days after receipt of written notice thereof given by the executive officer;a change in the geographic location at which the executive officer must perform services to a location more than fifty (50) miles from Houston, Texas or the location at which the executive officer normally performs such services as of the date of the employment agreement; orin the event a change of control has occurred, the assignment to the executive officer to any position (including status, offices, titles and reporting requirements), authority, duties or responsibilities that are not (i) as a senior executive officer with the ultimate parent company of the entity surviving or resulting from such change of control and (ii) substantially identical to the executive officer’s position (including status, offices, titles and reporting requirements), authority, duties and responsibilities as contemplated by the employment agreement.We also entered into a Change of Control Agreement with Mr. Menefee and our other executive officers, which provides that if the executive's employment with the Company is terminated by the Company without “cause” or the executive terminates employment for “good reason”, and such termination is made during a three-year protected period following a change of control, then the executive will be entitled to receive a lump sum payment equal to:all accrued and unpaid salary and prior fiscal year bonus earned but not paid as of the date of termination;a pro rata portion of the executive's target bonus for the fiscal year in which termination of employment occurs; andone (1) times the sum of (i) the executive's annual base salary in effect at the time of termination of employment and (ii) the executive's target annual bonus.Under the terms of the Change of Control Agreements, a three-year protected period began upon the consummation of the Sidewinder Merger on October 1, 2018.Compensation RiskThe Compensation Committee of the Board reviews and evaluates potential risks related to the design of our compensation programs. In its evaluation of our annual and long-term incentive compensation plans, as well as the incentive compensation arrangements described above, the Compensation Committee determined that such plans are designed with the appropriate balance of risk and reward relative to our overall business strategy. In addition, the stock ownership guidelines for our executive officers encourage them to focus on the creation of long-term value for stockholders rather than short-term results.Specifically, under our annual incentive compensation program, the amount of each participant’s prospective payment is established as a percentage of annual base salary, and is contingent on performance, including the attainment of targeted levels of performance that include both financial and non-financial measures. Notwithstanding the attainment of any established performance measures, the amount of the annual or incentive payments received by any participant is subject to the ultimate discretion of the Compensation Committee. Further, annual incentive awards are paid only after the Compensation Committee has reviewed our audited financial statements for the applicable performance period.Long-term equity incentive awards typically consist of restricted stock, restricted stock units and performance restricted stock units. The recipients of such awards can realize an increase in the value of their long-term equity awards only to the extent that our investors benefit from an increase in the market price for our common stock or the applicable performance metrics are met. Further, performance awards are paid only after the Compensation Committee has review our audited financial statement and other relevant data for the applicable performance period.Compensation Committee ReportThe Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis included in this Proxy Statement with management and, based on such review and discussions, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement.Submitted By:Compensation CommitteeDaniel McNease, Committee ChairmanThomas R. Bates, Jr.James G. MinmierEXECUTIVE COMPENSATIONAs noted above in “About the Annual Meeting—Implications of being an ‘emerging growth company’”, we are currently considered an emerging growth company for purposes of the SEC’s executive compensation disclosure rules. In accordance with such rules, we are required to provide a Summary Compensation Table, an Outstanding Equity Awards at Fiscal Year End Table, and Option Exercise and Stock Vesting Table, as well as limited narrative disclosures. Further, our reporting obligations extend only to the individuals serving as our Chief Executive Officer and our two other most highly compensated executive officers. For the year ended December 31, 2018, our NEOs were:NamePrincipal Position During 2018J. Anthony Gallegos, Jr.President and Chief Executive OfficerPhilip A. ChoyceExecutive Vice President and Chief Financial OfficerChristopher K. MenefeeSenior Vice President - Business DevelopmentByron A. DunnFormer President and Chief Executive OfficerSummary Compensation TableThe following table summarizes, with respect to our NEOs, information relating to the compensation earned for services rendered in all capacities during the fiscal years ended December 31, 2018, 2017 and 2016. Non-Equity Incentive Plan Stock Option All Other Salary Bonus Compensation Awards Awards Compensation Total Name and Principal Position Year ($) ($) 2018 106,250 42,500 156,294 2,382,746 — 15,744 2,703,534 (President and Chief Executive Officer) Philip A. Choyce 2018 319,000 — 477,479 1,219,840 — 20,100 2,036,419 (Executive Vice President and 2017 319,000 — 158,543 651,190 — 16,645 1,145,378 Chief Financial Officer) 2016 319,000 — 193,240 491,136 — 9,100 1,012,476 Christopher K. Menefee 2018 250,000 — 250,650 1,014,561 — 22,332 1,537,543 (Vice President - Business Development) 2017 250,000 — 71,000 239,438 — 26,645 587,083 2016 250,000 — 86,538 133,935 — 18,200 488,673 2018 356,923 — — 1,310,489 — 3,495,416 5,162,828 (Former Chief Executive Officer) 2017 464,000 — 329,440 1,559,757 — 15,600 2,368,797 2016 464,000 — 431,282 1,071,521 — 15,600 1,982,403 ____________(1)Amounts reflected in this column include total annual salary paid during the applicable fiscal year.(2)Amounts reflected in this column represent bonuses earned during the applicable year.(3)Amounts reflected in this column represent performance-based incentive compensation earned under a plan during the applicable year, excluding discretionary components not based on performance criteria and thus reported as bonus.(4)Amount reflected in this column reflect the value of restricted stock, restricted stock unit awards and performance stock unit awards (at target level) granted during the applicable fiscal year, calculated in accordance with FASB ASC Topic 718. Values represent the fair market value of such restricted stock on the date of grant. Assumptions used in the calculation of these amounts are included in Note 10 to our audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2018 filed with the SEC.(5)All other compensation includes our 401(k) Plan matching contributions and health insurance and life insurance premiums paid by us on behalf of each of our NEOs. For Mr. Menefee, amounts also include club dues paid by us on his behalf of $8,100, $9,500 and $9,100 for the fiscal years ended 2018, 2017 and 2016, respectively.(6)Mr. Gallegos was appointed as an executive officer on October 1, 2018 following the consummation of the Sidewinder Merger. Bonus payments made to Mr. Gallegos represent the discretionary portion of Mr. Gallegos annual incentive payment as discussed in our CD&A on page 44 of this Proxy Statement. Excludes $1,134,004 of predecessor compensation payments paid to Mr. Gallegos that were assumed in connection with the Sidewinder Merger. Stock awards for Mr. Gallegos represent awards made to him in connection with his appointment as President and Chief Executive Officer of the Company following completion of the Sidewinder Merger.(7)Mr. Dunn ceased to serve as an executive officer on October 1, 2018 following the consummation of the Sidewinder Merger. Pursuant to the terms of Mr. Dunn’s employment agreement, he was paid a cash severance equal to $3.48 million, which is reflected in the All Other Compensation column. Because he was not an executive of the Company on December 31, 2018, Mr. Dunn was not eligible to receive any payment under our annual incentive plan.Outstanding Equity Awards at 2018 Fiscal Year-EndThe following table sets forth information for each of our Named Executive Officers regarding the number of shares subject to both exercisable and unexercisable stock options and the number of shares of restricted stock, restricted stock units and performance-based restricted stock units that had not vested as of December 31, 2018: Equity incentive Equity plan incentive awards: plan market or awards: payout Number number of value of of Market unearned unearned Number of Number of shares value of shares, shares, Securities Securities or units shares or units or units or Underlying Underlying of stock units of other other Unexercised Unexercised that stock that rights that rights that Option, Option, Option Option have not have not have not have not Exercisable Unexercisable Exercise Expiration vested vested vested vested Name Grant Date (#) Price ($) Date (#) ($) J. Anthony Gallegos, Jr. 10/1/2018 — — — — 235,765 735,587 — — 12/26/2018 — — — — 395,122 1,232,781 — — Philip A. Choyce 3/2/2012 157,000 — 12.74 3/2/2022 — — — — 12/26/2018 — — — — 243,902 760,974 — — Christopher K. Menefee 12/4/2012 58,875 — 12.74 12/4/2022 — — — — 12/26/2018 — — — — 213,414 665,852 — — Byron A. Dunn 12/4/2012 400,500 — 12.74 — — — — — ____________(1)These stock options were issued under our 2012 Omnibus Plan and are fully vested.(2)These shares represent restricted stock awards and restricted stock units issued under our 2012 Omnibus Plan. The restricted stock units granted on October 1 vest ratably on each of October 1, 2019, October 1, 2020 and October 1, 2021. The restricted stock granted on December 26, 2018 represent five-year awards that vest ratably on each of December 26, 2021, December 26, 2022 and December 26, 2023.(3)The market value is based upon the applicable number of shares shown in the table multiplied by $3.12, the closing market price of our stock on December 31, 2018.Option Exercises and Stock VestedThe following table sets forth information concerning exercises of stock options and vesting of restricted stock for each of our Named Executive Officers during fiscal year 2018: Option Awards Stock Awards Name Number of Shares Value Number of Shares Value Acquired on Exercise Realized on Exercise Acquired on Vesting Realized on Vesting (#) ($) J. Anthony Gallegos, Jr. — — — — Philip A. Choyce — — 244,964 1,122,225 Christopher K. Menefee — — 106,995 494,712 Byron A. Dunn — — 609,094 2,798,572 ____________(1)Includes 181,811, 87,256 and 465,653 shares vesting upon consummation of the Sidewinder Merger for Messrs. Choyce, Menefee and Dunn, respectively. Excludes 116,239, 67,935 and 318,118 shares underlying performance awards forfeited at the time of the Sidewinder Merger for each of Messrs. Choyce, Menefee and Dunn, respectively with a total potential value on the date of forfeiture of $547,486, $319,974 and $1,498,336, respectively.(2)Value determined based upon the closing price of our common stock on the applicable vesting date.CEO Pay RatioMr. Gallegos had total compensation of $2,703,534 as reflected in the Summary Compensation Table included in this Proxy Statement. Our median employee’s annual total compensation for 2018 was $96,446, which considers both cash and equity compensation. As a result, we estimate that Mr. Gallegos 2018 annual total compensation was approximately 28 times that of our median employee.2012 Omnibus Incentive PlanThe Board has adopted, and our stockholders have approved, the Independence Contract Drilling 2012 Omnibus Plan. Our 2012 Omnibus Plan provides for the grant of options to purchase our common stock, both incentive options that are intended to satisfy the requirements of Section 422 of the Code and nonqualified options that are not intended to satisfy such requirements, stock appreciation rights, restricted stock, restricted stock units, performance stock, performance units, other stock-based awards and certain cash awards.As of April 15, 2019, we had authorized and reserved for issuance under our 2012 Plan 164,999 shares of our common stock relating to outstanding restricted stock and restricted stock unit awards. In connection with the adoption of the 2019 Omnibus Plan and subject to its approval at the Annual Meeting, no further awards will be made under the 2012 Omnibus Plan.Indemnification AgreementsWe have also entered into indemnification agreements with all of our directors and our Named Executive Officers. These indemnification agreements are intended to permit indemnification to the fullest extent now or hereafter permitted by the General Corporation Law of the State of Delaware. It is possible that the applicable law could change the degree to which indemnification is expressly permitted.The indemnification agreements cover expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement incurred as a result of the fact that such person, in his or her capacity as a director or officer, is made or threatened to be made a party to any suit or proceeding. The indemnification agreements generally cover claims relating to the fact that the indemnified party is or was an officer, director, employee or agent of us or any of our affiliates, or is or was serving at our request in such a position for another entity. The indemnification agreements also obligate us to promptly advance all reasonable expenses incurred in connection with any claim. The indemnitee is, in turn, obligated to reimburse us for all amounts so advanced if it is later determined that the indemnitee is not entitled to indemnification. The indemnification provided under the indemnification agreements is not exclusive of any other indemnity rights; however, double payment to the indemnitee is prohibited.We are not obligated to indemnify the indemnitee with respect to claims brought by the indemnitee against us, except for:•claims regarding the indemnitee’s rights under the indemnification agreement;•claims to enforce a right to indemnification under any statute or law; and•counter-claims against us in a proceeding brought by us against the indemnitee.We have also agreed to obtain and maintain director and officer liability insurance for the benefit of each of the above indemnitees. These policies include coverage for losses for wrongful acts and omissions and to ensure our performance under the indemnification agreements. Each of the indemnitees is named as an insured under such policies and provided with the same rights and benefits as are accorded to the most favorably insured of our directors and officers.DIRECTOR COMPENSATIONWe currently provide independent members of the Board with an annual retainer in the amount of $35,000 payable in quarterly installments. Each director also receives $1,500 per Board or committee meeting attended in person and $1,500 per board or committee meeting attended telephonically. The chairman of the Board is provided with an annual retainer of $20,000 payable in quarterly installments and the chairman of each Board committee is provided with the following annual retainers payable in quarterly installments: $15,000 (audit), $10,000 (compensation) and $10,000 (nominating and governance). We reimburse directors for travel and lodging expenses incurred in connection with their attendance at meetings.Independent directors are eligible to receive equity compensation awards under our 2012 Omnibus Plan.The following table summarizes, with respect to our directors, information relating to the compensation earned for services rendered in all capacities during the fiscal year ended December 31, 2018.. Fees Earned or Other Paid in Cash Stock Awards Compensation Total Director ($) ($) ($) Thomas R. Bates, Jr. 95,500 100,000 — 195,500 James D. Crandell 69,500 100,000 — 169,500 Matthew D. Fitzgerald 94,500 100,000 — 194,500 Daniel F. McNease 87,000 100,000 — 187,000 17,750 100,000 — 117,750 20,000 — — 20,000 48,750 100,000 — 148,750 ____________(1)For each of Messrs. Bates, Crandell, Fitzgerald, McNease & Noonan, includes meeting fees associated with 13 special meetings held by the Board of Directors during 2018 related to the evaluation, negotiation, approval and consummation of the Sidewinder Merger.(2)Mr. Minmier was appointed to the Board on October 1, 2018 pursuant to the terms and conditions of the Sidewinder Merger. Includes $100,000 of restricted stock units awarded to Mr. Minmier in connection with his initial appointment to the Board. These RSU's vest over a three-year period.(3)Mr. Piekarski was appointed to the Board on October 1, 2018 pursuant to the terms and conditions of the Sidewinder Merger. Pursuant to the terms of the Sidewinder Stockholders’ Agreement, director fees of $20,000 per quarter associated with Mr. Piekarski’s service are assigned to MSD Partners. Mr. Piekarski does not participate in equity awards from the Company.(4)Cash fees due to Mr. Noonan were assigned to 4D Global Energy Investments plc. Mr. Noonan left the Board effective October 1, 2018 in connection with the closing of the Sidewinder Merger.MATTERS FOR THE 2019 ANNUAL MEETINGAs of the date of this Proxy Statement, theBUSINESSmatters tobusiness that will be acted uponpresented for consideration at the AnnualSpecial Meeting other than the proposals included in the accompanying notice and described in this Proxy Statement.those items stated above. If any other matter requiring a vote of stockholders arises, including a question of adjourningbusiness should come before the AnnualSpecial Meeting, the persons named asvotes may be cast pursuant to proxies in the accompanying proxy card will have the discretionrespect to vote thereon according to theirany such business in the best judgment of the person or persons acting under the proxies of what they consider to be in the best interests of the Company. The accompanying proxy card confers discretionary authority to act with respect to any additional matters that may come before the AnnualSpecial Meeting or any adjournment or postponement thereof.2018 ANNUAL REPORT ON FORM 10-KA copy Although representatives of our Annual Report on Form 10-K for the fiscal year ended December 31, 2018, including the financial statements and the financial statement schedules, if any, butauditors will not including exhibits (the “2018 Annual Report”), accompanies this Proxy Statement. Except for the financial statements included in the 2018 Annual Report that are specifically incorporated by reference herein, the 2018 Annual Report is not incorporated in this Proxy Statement and is not to be deemed part of this proxy soliciting material.We have filed our Form 10-K for the fiscal year ended December 31, 2018 with the Securities and Exchange Commission. It is available free of charge at the Securities and Exchange Commission’s web site at www.sec.gov and our website at http://icdrilling.investorroom.com/sec_filings. Upon written requestmeeting, they will be available to participate by a stockholder, we will mail, without charge, a copytelephone, if needed.
CERTIFICATE OF AMENDMENT TO THE AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF INDEPENDENCE CONTRACT DRILLING, INC.
(Pursuant to Section 242 of our Form 10-K, including the financial statements and financial statement schedules, if any, but excluding exhibits toGeneral Corporation Law of the Form 10-K. Exhibits to the Form 10-K are available upon paymentState of a reasonable fee, which is limited to our expenses in furnishing the requested exhibit. Such requests should be directed by mail to Delaware)
Independence Contract Drilling, Inc., a corporation organized and existing under and by virtue of the provisions of the General Corporation Law of the State of Delaware (the “DGCL”),
DOES HEREBY CERTIFY:
FIRST: That the name of this corporation is Independence Contract Drilling, Inc. (the “Corporation”) and that the Corporation was originally incorporated pursuant to the DGCL on November 4, 2011 under the name Independence Contract Drilling, Inc.
SECOND: That the Board of Directors of the Corporation duly adopted resolutions setting forth the proposed amendment to the Amended and Restated Certificate of Incorporation of the Corporation, declaring said amendment to be advisable and in the best interests of the Corporation and its stockholders and authorizing the appropriate officers of the Corporation to solicit the consent of the stockholders therefor, which resolutions setting forth the proposed amendment are substantially as follows:
RESOLVED:
The first paragraph of Article IV of the Amended and Restated Certificate of Incorporation of this Corporation be amended and restated to read in its entirety as follows:
“1. This Corporation is authorized to issue two classes of stock to be designated, respectively, “Common Stock” and “Preferred Stock.” The total number of shares of stock which the Corporation shall have the authority to issue is 60,000,000 consisting of 50,000,000 shares of Common Stock, with a par value of $.01 per share and 10,000,000 shares of Preferred Stock, with a par value of $.01 per share. Each share of Common Stock shall entitle the holder thereof to one (1) vote on each matter submitted to a vote at any meeting of stockholders; provided, that, except as otherwise required by law, holders of Common Stock, as such, shall not be entitled to vote on any amendment to this Certificate (including, but not limited to, any certificate of designations relating to any series of Preferred Stock) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other such series, to vote thereon pursuant to this Certificate (including, but not limited to, any certificate of designations relating to any series of Preferred Stock) or pursuant to the DGCL.”
RESOLVED:
Article IV of the Amended and Restated Certificate of Incorporation of this Corporation be amended to add the following paragraph as follows:
“4. Upon this Certificate of Amendment becoming effective pursuant to the General Corporation Law of the State of Delaware (the “Effective Time”), each share of Common Stock, either issued and outstanding or held by the Corporation as treasury stock, in each case immediately prior to the Effective Time (the “Old Common Stock”), shall be automatically reclassified as and converted into [1/10 to 1/20] of a fully paid and nonassessable share of Common Stock (the “New Common Stock”). No fractional shares of the New Common Stock shall be issued in connection with the Reverse Stock Split. The Company will pay cash in lieu of any fractional shares. Cash paid in lieu of any fractional shares shall be determined based on the average closing market price of the
Old Common Stock on the New York Stock Exchange (or if the Old Common Stock does not remain listed thereon, on the principal securities exchange or quotation service for the Old Common Stock, as determined by the Board of Directors of the Corporation) for the ten trading days immediately preceding the day of the Effective Time, with payment for eachone-tenth of a share of New Common Stock being equal to the average closing price of one share of Old Common Stock on the New York Stock Exchange (or if the Old Common Stock does not remain listed thereon, on the principal securities exchange or quotation service for the Old Common Stock, as determined by the Board of Directors of the Corporation). Any stock certificate that, immediately prior to the Effective Time, represented shares of the Old Common Stock, shall from and after the Effective Time, automatically and without the necessity of presenting the same for exchange, represent that number of whole shares of New Common Stock into which such shares of Old Common Stock shall have been reclassified pursuant to this Certificate of Amendment.”
THIRD: That thereafter said amendment was duly adopted in accordance with the provisions of Section 242 of the DGCL by written consent of the stockholders holding the requisite number of shares required by statute given in accordance with and pursuant to Section 228 of the DGCL.
IN WITNESS WHEREOF, Independence Contract Drilling, Inc. has caused this Certificate of Amendment to the Amended and Restated Certificate of Incorporation to be signed by its Chief Executive Officer this day of , 2020.
By: | ||
J. Anthony Gallegos, Jr. | ||
Chief Executive Officer |
INDEPENDENCE CONTRACT DRILLING, INC.
20475 State Highway 249, Suite 300
Houston, TX 77070 Attn: Corporate Secretary
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VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
KEEP THIS PORTION FOR YOUR RECORDS
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DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
The Board of Directors recommends you vote FOR proposals 1 and 2. | For | Against | Abstain | |||||||||
1 | To approve an amendment to the Company’s Amended and Restated Certificate of Incorporation to effect a one-time reverse stock split (the “Reverse Split Amendment”) of common stock at a ratio of 1 share-for-10 shares up to a ratio of 1 share-for-20 shares, which ratio will be selected by the Company’s Board of Directors and set forth in a public announcement, together with a reduction in the authorized number of shares of the Company’s common stock from 200,000,000 shares to 50,000,000 shares (the “Reverse Split Proposal”). | ☐ | ☐ | ☐ | ||||||||
2 | The adjournment or postponement of the Special Meeting, if necessary, to solicit additional proxies in the event that there are not sufficient votes at the time of the Special Meeting to approve Proposal 1 (the Reverse Split Proposal). | ☐ | ☐ | ☐ |
NOTE: Such other business as may properly come before the meeting or any adjournment thereof.
For address change/comments, mark here. | ☐ | |||||||||
(see reverse for instructions) | Yes | No | ||||||||
Please indicate if you plan to attend this meeting | ☐ | ☐ | ||||||||
Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. |
Signature [PLEASE SIGN WITHIN BOX] | Date | Signature (Joint Owners) | Date |
Dear Stockholder, Independence Contract Drilling, Inc. encourages you to take advantage of the convenient ways by which you can vote these shares. You can vote these shares 24 hours a day, 7 days a week, using either a touch-tone telephone or through the Internet. Your telephone or Internet vote authorizes the named proxies on this proxy/voting instruction card to vote in the same manner as if you marked, singed, dated and returned the proxy/voting instruction card. If you choose to vote these shares by telephone or the Internet, there is no need to mail back your proxy/voting instruction card. To vote the shares by telephone or via the Internet, please have this proxy/voting instruction card in hand and follow the instructions on the reverse side. Your vote is important. Thank you for voting. Important Notice Regarding the Availability of Proxy Materials for the Special Meeting: The Notice of Special Meeting and Proxy Statement and other documents provided with or incorporated by reference into the Proxy Statement are available at www.proxyvote.com. If you do not vote via the Internet or telephone, fold along the perforation, detach and return the bottom portion in the enclosed envelope. |
Important Notice Regarding the Availability of Proxy Materials for the Independence Contract Drilling, Inc. Special Meeting of Stockholders to be held on February 6, 2020:
The Notice of the Special Meeting and Proxy Statement are available at investor.relations@icdrilling.com.
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INDEPENDENCE CONTRACT DRILLING, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON February 6, 2020 AT 9:00 AM LOCAL TIME
The undersigned hereby constitutes and appoints J. Anthony Gallegos, Jr. and Philip A. Choyce, and each of them, the attorneys and proxies of the undersigned with the full power of substitution to appear and to vote all of the shares of common stock of Independence Contract Drilling, Inc., held of record by the undersigned on February 6, 2020, as if personally present at the Special Meeting of Stockholders to be held on February 6, 2020, and any adjournment or postponement thereof, as designated on the reverse.
Each signatory to this proxy acknowledges receipt from Independence Contract Drilling, Inc., prior to execution of this proxy, of a notice of Special Meeting of Stockholders and a Proxy Statementdated , 2019.
This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Delaware General Corporation Law, the Company will maintain at its corporate offices in Houston, Texas, a listrecommendations of the stockholders entitledBoard of Directors, as noted on the reverse. This proxy also delegates discretionary authority to vote at the Annual Meeting. The list will be open to the examination of any stockholder, for purposes germane to the Annual Meeting, during ordinary business hours for at least ten daysupon such other matters as may properly come before the Annual Meeting.
YOU ARE URGED TO DATE, SIGN AND RETURN THIS PROXY PROMPTLY IN THE ENVELOPE PROVIDED. IT IS IMPORTANT FOR YOU TO BE REPRESENTED AT THE SPECIAL MEETING. THIS PROXY MUST BE RECEIVED BY MAIL IN THE POSTAGE-PAID ENVELOPE PROVIDED OR ELECTRONICALLY VIA THE INTERNET AT WWW.PROXYVOTE.COM OR BY PHONE AT1-800-690-6903.
Address change/comments: | ||||
(If you noted any Address Changes and/or Comments above, please mark corresponding box on Form 10-K for the fiscal year ended December 31, 2018 are available at
Continued and to be signed on reverse side