Stock-Based Compensation

In March 2012, we adopted the 2012 Omnibus Long-Term Incentive Plan (the “2012 Plan”) providing for common stock-based awards to employees and to non-employee directors. The 2012 plan was subsequently amended in August of 2014. The 2012 Plan, as amended, permits the granting of various types of awards, including stock options, restricted stock and restricted stock unit awards, and up to 3,454,000 shares were authorized for issuance. Restricted stock and restricted stock units may be granted for no consideration other than prior and future services. The purchase price per share for stock options may not be less than the market price of the underlying stock on the date of grant. Stock options expire ten years after the grant date. We have the right to satisfy option exercises from treasury shares and from authorized but unissued shares. As of March 31, 2016, approximately 31,648 shares were available for future awards.

A summary of compensation cost recognized for stock-based payment arrangements is as follows:



(in thousands)	Three Months Ended March 31,
	2016		2015
Compensation cost recognized:
Stock options	$	69	$	214
Restricted stock and restricted stock units	1,086		940
Total stock-based compensation	$	1,155	$	1,154

No stock-based compensation was capitalized in connection with rig construction activity during the three months ended March 31, 2016. Approximately $0.2 million in stock-based compensation was capitalized in connection with rig construction activity during the three months ended March 31, 2015.

Stock Options

We use the Black-Scholes option pricing model to estimate the fair value of stock options granted to employees and non-employee directors. The fair value of the options is amortized to compensation expense on a straight-line basis over the requisite service periods of the stock awards, which are generally the vesting periods.

There were no stock options granted during the three months ended March 31, 2016 or the three months ended March 31, 2015.

A summary of stock option activity and related information for the three months ended March 31, 2016 is as follows:



	Three Months Ended March 31, 2016
	Options	Weighted Average Exercise Price
Outstanding at January 1, 2016	956,653	$	12.74
Granted	—	—
Exercised	—	—
Forfeited/expired	—	—
Outstanding at March 31, 2016	956,653	$	12.74
Exercisable at March 31, 2016	882,340	$	12.74

A summary of our unvested stock options as of March 31, 2016, and the changes during the three months then ended is presented below:



	Three Months Ended March 31, 2016
	Outstanding		Weighted Average Grant-Date Fair Value
Unvested as of January 1, 2016	104,143		$	3.88
Granted	—		—
Vested	(29,830	)	4.27
Forfeited/expired	—		—
Unvested as of March 31, 2016	74,313		$	3.73

The number of options vested at March 31, 2016 was 882,340 with a weighted average remaining contractual life of 6.1 years and a weighted-average exercise price of $12.74 per share.

As of March 31, 2016, the unrecognized compensation cost related to outstanding stock options was $0.2 million. This cost is expected to be recognized over a weighted-average period of 0.4 years.

Restricted Stock

Restricted stock awards consist of grants of our common stock that vest ratably over three to four years. We recognize compensation expense on a straight-line basis over the requisite service period, which is generally the vesting period. The fair value of restricted stock awards is determined based on the fair market value of our shares on the grant date. As of March 31, 2016, there was $2.9 million of total unrecognized compensation cost related to unvested restricted stock awards. This cost is expected to be recognized over a weighted-average period of 0.7 years.

A summary of the status of our restricted stock awards as of March 31, 2016, and of changes in restricted stock outstanding during the three months ended March 31, 2016, is as follows:



	Three Months Ended March 31, 2016
	Shares	Weighted Average Grant-Date Fair Value Per Share
Outstanding at January 1, 2016	388,265	$	10.80
Granted	—	—
Vested	—	—
Forfeited	—	—
Outstanding at March 31, 2016	388,265	$	10.80

Restricted Stock Units

We have granted restricted stock units ("RSUs") to key employees under the 2012 Plan. We have granted three year vesting RSUs, as well as performance-based and market-based RSUs, where each unit represents the right to receive, at the end of a vesting period, up to one and a half to two shares of ICD common stock at no cost. Vesting of the market-based RSUs is based on our three year total shareholder return ("TSR") as measured against a three year TSR of a defined peer group and vesting of the performance-based RSUs is based on our cumulative EBITDA ("CEBITDA"), as defined in the restricted stock unit agreement, over a three year period. We used a Monte Carlo simulation model to value the TSR market-based RSUs at the date of grant. The fair value of the CEBITDA performance-based RSUs was based on the market price of our common stock on the date of grant. During the restriction period, the RSUs may not be transferred or encumbered, and the recipient does not receive dividend equivalents or have voting rights until the units vest. As of March 31, 2016, there was $5.1 million of unrecognized compensation cost related to unvested RSUs that is expected to be recognized over a weighted-average period of 1.1 years.

A summary of the status of our RSUs as of March 31, 2016, and of changes in RSUs outstanding during the three months ended March 31, 2016, is as follows:



	Three Months Ended March 31, 2016
	RSUs	Weighted Average Grant-Date Fair Value Per Share
Outstanding at January 1, 2016	463,413	$	12.97
Granted	814,170	4.01
Vested and converted	—	—
Forfeited	—	—
Outstanding at March 31, 2016	1,277,583	$	7.26