We have an equity incentive compensation plan for our officers, independent contractors, employees and non-employee directors which is designed to encourage stock ownership by such persons. We may grant both time-vesting and performance-vesting awards, which are earned on the achievement of certain performance criteria. The following types of awards may be granted under our incentive plan:

Pursuant to the terms of the Plan, the Diamond Offshore Drilling, Inc. 2021 Long-Term Stock Incentive Plan (or the Equity Incentive Plan) was adopted and approved on the Effective Date. The Equity Incentive Plan provides for the grant of stock options, SARs, restricted stock, RSUs, performance awards, and other stock-based awards or any

combination thereof to eligible participants. Vesting conditions and other terms and conditions of awards under the Equity Incentive Plan are determined by our Board of Directors (or Board) or the compensation committee of our Board, subject to the terms of the Equity Incentive Plan. RSUs and restricted stock awards may be issued with performance-vesting or time-vesting features and, except for restricted stock awards issued to our Chief Executive Officer, they are not participating securities. The aggregate number of shares of Common Stock initially available for issuance pursuant to awards under the Equity Incentive Plan was 11,111,111.

Total compensation cost recognized for all awards under the Equity Incentive Plan for the Successor periods for the year ended December 31, 2022 and from April 24, 2021 to December 31, 2021 was $20.2 million and $10.8 million, respectively. Tax benefits recognized for the Successor periods for the year ended December 31, 2022 and from April 24, 2021 to December 31, 2021 were $2.9 million and $2.0 million, respectively. As of December 31, 2022, there was $11.7 million of total unrecognized compensation cost related to non-vested awards under the Equity Incentive Plan, which we expect to recognize over a weighted average period of one and one-half years.

RSUs. RSUs are contractual rights to receive shares of our Common Stock in the future if the applicable vesting conditions are met. During the Successor period, we granted an aggregate 347,797 time-vesting RSU awards to our non-employee members of the Board (or Board RSUs). The Board RSUs vest and become non-forfeitable with respect to 30% of the RSUs on the first anniversary of the grant date and 70% of the RSUs on the second anniversary of the grant date, subject to the recipient’s continuous service through the applicable vesting date. The vested Board RSUs will be issued at the earliest of (i) the fifth anniversary of the grant date, (ii) a separation from service, or (iii) a change in control. The recipients may elect, with respect to up to 40% of the vested and non-forfeitable Board RSUs, to receive cash equal to the fair market value of those RSUs instead of shares. Accordingly, 40% of the Board RSUs are considered liability-classified awards, which are remeasured each period. The remaining 60% of the Board RSUs are equity-classified awards, for which the fair value was estimated based on the fair market value of our Common Stock on the date of grant.

Effective July 1, 2021, the Board approved a new key employee retention and incentive plan covering executive officers and certain non-executive key employees. During the year ended December 31, 2022, and the Successor period between April 24, 2021 and December 31, 2021 we granted 535,516 and 1,916,043 time-vesting RSUs, respectively. The RSUs will vest annually over a period of three years from the grant date.

Restricted Stock. Pursuant to the terms of the Equity Incentive Plan, we granted 222,222 shares of time-vesting restricted stock awards to our Chief Executive Officer. Two-thirds of the time-vesting awards were issued and have vested, and the remaining one-third will vest in May 2023, subject to his continuous service or employment. Holders of restricted stock have all privileges of a stockholder of the Company with respect to the restricted stock, including without limitation the right to vote any shares underlying such restricted stock and to receive dividends or other distributions in respect thereof.

The fair value of time-vesting RSUs and restricted stock awards granted under the Equity Incentive Plan was estimated based on the fair market value of our Common Stock on the date of grant.

A summary of time-vesting RSU and restricted stock award activity under the Successor Equity Incentive Plan as of December 31, 2022 and changes during the year ended December 31, 2022 is as follows:


	Number of Awards			Weighted -Average Grant Date Fair Value Per Share
Nonvested awards at January 1, 2022		2,178,690		$	8.75
Granted		545,651		$	6.68
Vested		(616,835	)	$	8.75
Forfeited		(162,368	)	$	8.44
Nonvested awards at December 31, 2022		1,945,138		$	8.20

The weighted average grant-date fair value of restricted stock awards granted during the year ended December 31, 2022 and the Successor period from April 24, 2021 to December 31, 2021 was $6.68 and $8.75, respectively. The total fair value of the restricted stock awards that vested during the year ended December 31, 2022 and from April 24, 2021 through December 31, 2021 was $3.9 million and $0.6 million, respectively.

RSUs. During the Successor periods for the year ended December 31, 2022 and from April 24, 2021 through December 31, 2021, we granted 709,148 and 1,733,404 performance-vesting RSU awards, respectively.

The performance-vesting RSUs granted during the Successor year ended December 31, 2022 will vest at the end of a three-year period upon the achievement of certain market conditions and continuous employment of the award holder. The fair value of these shares was estimated using a Monte Carlo simulation.

The performance-vesting RSUs granted during the Successor period from April 24, 2021 to December 31, 2021 vest annually over a three-year cycle and are distributed based on performance metrics and continuous employment. The fair value of these shares was estimated based on the fair market value of our Common Stock on the date of grant.

A summary of performance-vesting RSU activity under the Equity Incentive Plan as of December 31, 2022 and changes during the year ended December 31, 2022 is as follows:


	Number of Awards			Weighted -Average Grant Date Fair Value Per Share
Nonvested awards at January 1, 2022		1,440,641		$	8.75
Granted		709,148		$	5.71
Vested		(444,474	)	$	8.75
Forfeited		(184,018	)	$	8.04
Nonvested awards at December 31, 2022		1,521,297		$	7.42

The weighted average grant-date fair value of performance awards granted during the year ended December 31, 2022 and the Successor period from April 24, 2021 to December 31, 2021 was $5.71 and $8.75, respectively. The total fair value of performance awards vested during year ended December 31, 2022 was $3.2 million.

Restricted Stock. In May 2021, we granted 777,777 shares of performance-vesting restricted stock to our Chief Executive Officer pursuant to the terms of the Equity Incentive Plan. These awards vest upon achievement of both a market and performance condition, and any awards not vested as of May 8, 2027 will be forfeited. Vesting is contingent upon certain conditions (as defined in the award agreement under the Equity Incentive Plan). As of December 31, 2022, a significant portion of the vesting conditions had been satisfied, resulting in the vesting of 747,407 shares of restricted stock during 2022. We recognized the total estimated grant date fair value of these awards of $5.4 million as compensation expense during the Successor year ended December 31, 2022. The weighted-average grant-date fair value of these performance-vesting restricted stock awards was $6.89 million. The total fair value of the awards that vested during the year ended December 31, 2022 was $6.2 million.

The performance-vesting restricted stock awards granted during the year ended December 31, 2022 and the performance-vesting restricted stock awards granted to our Chief Executive Officer during the Successor period from April 24, 2021 through December 31, 2021 were valued using a Monte Carlo simulation assuming a Geometric Brownian Motion in a risk-neutral framework and using the following assumptions:


	Awards granted
	2022			2021
Expected life of awards (in years)		3			3
Expected volatility		75.00	%		70.00	%
Risk-free interest rate		2.71	%		0.29	%

A summary of performance-vesting restricted stock activity under the Successor Equity Incentive Plan as of December 31, 2022 and changes during the year ended December 31, 2022 is as follows:


	Number of Awards			Weighted -Average Grant Date Fair Value Per Share
Nonvested awards at January 1, 2022		777,777		$	6.89
Vested		(747,407	)	$	6.89
Nonvested awards at December 31, 2022		30,370		$	6.89

Under the Predecessor's Equity Incentive Compensation Plan (or the Predecessor Equity Plan), we had a maximum of 7,500,000 shares of our common stock initially available for the grant or settlement of awards, subject to adjustment for certain business transactions and changes in capital structure. On May 27, 2020, the Bankruptcy Court approved a new key employee retention plan and a new non-executive incentive plan covering certain non-executive key employees. On June 23, 2020, the Bankruptcy Court approved a key employee incentive plan covering certain additional key employees, including our executive officers. Upon the participating employee’s acceptance of an award under the new compensation plans, all outstanding unvested incentive awards previously granted to the employee under our Predecessor Equity Plan, consisting of time-vesting RSUs and/or SARs, were canceled. Any remaining outstanding awards under the Predecessor Equity Plan were automatically canceled on the Effective Date.

Total compensation cost and tax benefit recognized for all awards under the Predecessor Equity Plan for the Predecessor year ended December 31, 2020 were $5.6 million and $0.2 million, respectively. Due to the cancellation of the awards under the Predecessor Equity Plan described above, no additional compensation cost is recognizable related to the Predecessor plan.