PIONEER ENERGY SERVICES CORP (Form: 8-K, Received: 09/13/2019 16:02:09)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (date of earliest event reported): September 10, 2019

PIONEER ENERGY SERVICES CORP.

(Exact name of registrant as specified in its charter)



Texas	1-8182	74-2088619
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)



1250 N.E. Loop 410, Suite 1000 San Antonio, Texas	78209
(Address of principal executive offices)	(ZIP Code)

Registrant’s telephone number, including area code: (855) 884-0575

_________________________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

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

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

q Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act

(17 CFR 240.14d-2(b))

q Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act

(17 CFR 240.13e-4(c))



Securities registered pursuant to Section 12(b) of the Act
Title of each class	Trading Symbol(s)	Name of each exchange on which registered

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

Emerging growth company q

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

_________________________________________

Item 5.02(e) Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

The Board of Directors (the “Board”) of Pioneer Energy Services Corp. (the “Company”), in consultation with its outside compensation consultants, has reviewed the Company’s incentive plans to determine whether they continue to fulfill their purpose of retaining key employees, incentivizing key employees to perform at a high level and aligning the interests of key employees with shareholders. After reviewing these plans, the Board determined that it was in the best interests of the Company and its stockholders to restructure the Company’s incentive plans to retain its key employees and encourage them to devote their best efforts to the Company as the Company explores various strategic alternatives. Accordingly, on September 10, 2019, the Compensation Committee recommended, and the Board approved: (a) the termination of the Company’s 2019 annual cash incentive program and the temporary discontinuation of equity incentive grants; (b) retention bonus agreements (the “Retention Bonus Agreements”) with certain of the Company’s key employees, including each of the Company’s executive officers; (c) the payment of special incentive bonuses to certain of the Company’s key employees, including each of the Company’s executive officers; and (d) the adoption of a new cash-based incentive program and the award of incentive bonuses thereunder to certain of the Company’s key employees, including each of the Company’s executive officers.

Retention Bonuses

The Retention Bonus Agreements for the executive officers provide for a one-time lump sum cash payment in the amount of 150% of the executive officer’s current annualized base salary, payable upon the executive officer’s execution of the Retention Bonus Agreement. The amounts of the retention bonuses to be made to the executive officers under the Retention Bonus Agreements are set forth in the table below:



Executive Officer	Annual Base Salary	Retention Bonus Amount
Wm. Stacy Locke	$800,000	$1,200,000
Lorne E. Phillips	$415,000	$622,500
Carlos R. Peña	$400,000	$600,000
Brian L. Tucker	$400,000	$600,000
Bryce T. Seki	$350,000	$525,000

Each executive officer who receives a retention bonus is required to repay the full amount of the retention bonus (less amounts withheld for taxes) if his employment is terminated by the Company for “cause” or he resigns without “good reason” (each term as defined in the Retention Bonus Agreement), in either case, before the first anniversary of the retention bonus award; provided, however, that upon the occurrence of a “change in control” (as defined in the Company’s Amended and Restated 2017 Incentive Plan (the “LTIP”)) prior to the first anniversary of the retention bonus award, the Retention Bonus Agreements will terminate and the executive officers will not be required to repay their retention bonuses.

Each Retention Bonus Agreement includes a general release of claims in favor of the Company and its affiliates as a condition to payment of the retention bonus and a requirement that the executive officer comply with certain restrictive covenants, including a one-year non-competition covenant (which ceases to apply if the executive officer is terminated without cause or resigns for good reason), a one-year non-solicitation covenant, and a non-disparagement covenant. The foregoing description of the Retention Bonus Agreement does not purport to be complete and is qualified in its entirety by reference to the full terms and

conditions of the Retention Bonus Agreement, which is filed with this Form 8-K as Exhibit 10.1 and is incorporated herein by reference.

Special Incentive Bonuses

Based on the implementation of the 2019 Employee Incentive Plan (the “Incentive Plan”), the Board terminated the Company’s annual cash incentive program and has temporarily discontinued the granting of long-term incentive awards under the LTIP. In light of these changes and to provide a replacement for the Company’s 2019 incentive compensation opportunities for the first three quarters of 2019, the Board approved the lump sum cash payment of a one-time special bonus (the “Special Incentive Bonus”) to certain key employees, including each of the executive officers. The Special Incentive Bonuses will be paid upon the recipient’s execution of a bonus award letter. As a condition to receiving the Special Incentive Bonus, each recipient agrees to forfeit his or her outstanding long-term cash incentive awards previously received under the LTIP. If, prior to April 1, 2020, the recipient voluntarily resigns or is terminated by the Company for “cause” (as defined in the Incentive Plan), in either case, the recipient will be required to repay to the Company 100% of the Special Incentive Bonus less the amount of any applicable withholdings and deductions. The Special Incentive Bonus for each of the Company’s executive officers is as follows:



Name of Participant	Special Incentive Bonus
Wm. Stacy Locke	$1,558,500
Lorne E. Phillips	$614,063
Carlos R. Peña	$521,250
Brian L. Tucker	$521,250
Bryce T. Seki	$420,000

2019 Employee Incentive Plan

The Incentive Plan becomes effective on October 1, 2019, and has a term continuing until December 31, 2020, unless earlier terminated or extended by the Compensation Committee. Each of the executive officers has been designated as a participant under the Incentive Plan.

The Incentive Plan will be administered by the Compensation Committee or, in its discretion, the Board (as applicable, the “Administrator”). Subject to the provisions of the Incentive Plan and any bonus award letter between an executive officer and the Company, each executive officer will have the opportunity to earn a cash bonus (a “Quarterly Performance Bonus”) for each calendar quarter during the term of the Incentive Plan (each such quarter, a “Performance Period”) ranging from 0% to 150% of such executive officer’s “target bonus amount” (the “Target Bonus Amount”). The amount (if any) of the Quarterly Performance Bonus earned by an executive officer with respect to a Performance Period will be determined by the Administrator based on the weighted actual achievement of the Adjusted EBITDA (as defined in the Incentive Plan) and safety performance goals established by the Administrator prior to the start of such Performance Period (the “Performance Goals”). An executive officer’s Target Bonus Amount for a Performance Period is set forth in the executive officer’s bonus award letter, and is a percentage of the base salary earned by the executive officer with respect to such Performance Period. The Target Bonus Amount for each executive officer is as follows:



Name of Participant	Target Bonus Amount (as % of Performance Period base salary)	Current Target Bonus Amount (in dollars assuming current base salary)
Wm. Stacy Locke	260%	$519,500
Lorne E. Phillips	197%	$204,688
Carlos R. Peña	174%	$173,750
Brian L. Tucker	174%	$173,750
Bryce T. Seki	160%	$140,000

The foregoing descriptions of the Incentive Plan and the bonus award letter are not complete and are qualified in their entirety by reference to the Incentive Plan and the form of bonus award letter, which are filed as Exhibit 10.2 and Exhibit 10.3, respectively, to this Form 8‑K and incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits.



10.1	Form of Retention Bonus Agreement
10.2	Pioneer Energy Services Corp. 2019 Employee Incentive Plan
10.3	Form of Bonus Award Letter (2019 Employee Incentive Plan)

SIGNATURE

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



	PIONEER ENERGY SERVICES CORP.




By:	/s/ Lorne E. Phillips
	Lorne E. Phillips
	Executive Vice President and Chief Financial Officer

Date: September 13, 2019

EXHIBIT INDEX



Exhibit
Number		Exhibit Description
10.1		Form of Retention Bonus Agreement
10.2		Pioneer Energy Services Corp. 2019 Employee Incentive Plan
10.3		Form of Bonus Award Letter (2019 Employee Incentive Plan)

Exhibit 10.1

[Pioneer Energy Services Corp. Letterhead]

[DATE]

By Hand Delivery

[Executive Name]

[Executive Title]

[Pioneer Energy Services Corp.]

RE: Retention Award

Dear _____:

Pioneer Energy Services Corp. (the “Company”) recognizes the important goal of retaining you as an employee of the Company, and, in furtherance of that goal, the Company wishes to provide financial incentives for you to remain an employee for the period of time specified in this letter agreement (this “Agreement”) and to continue to perform in a highly effective manner and contribute to the success of the Company and its affiliates. Except to the extent otherwise defined herein, capitalized terms used in this Agreement shall have the meaning given them on Exhibit A attached hereto.

1.Retention. To incentivize you to remain committed to the Company, you are eligible to receive a cash award of _______ (the “Retention Award”), subject to the terms and conditions set forth below. The Retention Award shall be made as an advance payment for your future services, and will be paid following the date of your acceptance of this Agreement (the “Effective Date”), subject to your continued employment as of such payment date.

2.Repayment. In the event that your employment with the Company or its affiliates is terminated prior to the Retention Date (as defined below) by (a) the Company for Cause or (b) you other than for Good Reason, you shall repay to the Company, in immediately available funds, an amount equal to the Retention Award, less any amounts withheld by the Company for income and employment taxes, within thirty (30) days following the date of your termination of employment and, in order to satisfy such repayment, you agree that the Company may offset against, and you hereby authorize the Company to deduct from, any payments due to you, or to your estate, heirs, legal representatives or successors; provided that, no such offset shall result in a violation of Section 409A of the Internal Revenue Code of 1986, as amended, and the applicable Treasury regulations and administrative guidance issued thereunder (collectively, “Section 409A”). For the avoidance of doubt, in the event that your employment with the Company is terminated either (x) prior to the Retention Date by (i) the Company without Cause, (ii) you for Good Reason or (iii) the Company or you due to your death or Disability, or (y) on or following the Retention Date for any reason or no reason at all, you shall not be required to repay the Retention Award.

For purposes of this Agreement, the term “Retention Date” means the first anniversary of the Effective Date.

3.Confidential Information. You agree to preserve and protect the confidentiality of all Confidential Information (as defined below), which you acknowledge is the sole and exclusive property of the Company. You agree that you will not, at any time during your term of employment or thereafter, make any unauthorized disclosure of Confidential Information, or make any use thereof, except, in each case, in the carrying out of your responsibilities to the Company. You further agree to preserve and protect the confidentiality of all confidential information of third parties provided to the Company by such third parties with an expectation of confidentiality. You shall use commercially reasonable efforts to cause all persons or entities to whom any Confidential Information shall be disclosed by you hereunder to preserve and protect the confidentiality of such Confidential Information. You shall have no obligation hereunder to keep confidential any Confidential Information if and to the extent disclosure thereof is specifically required by applicable laws; provided, however, that in the event disclosure is required by applicable laws and you are making such disclosure, you shall provide the Company with prompt notice of such requirement prior to making any

such disclosure to the extent practicable and not legally prohibited, so that the Company may seek an appropriate protective order at the Company’s sole cost and expense.

Notwithstanding anything to the contrary contained herein, you will not be held criminally or civilly liable under any federal or state trade secret law for any disclosure of Confidential Information that is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding. If you file a lawsuit for retaliation by the Company for reporting a suspected violation of law, you may disclose the Company’s Confidential Information to your attorney and use the Confidential Information in the court proceeding if you (A) file any document containing the trade secret under seal; and (B) do not disclose the Confidential Information, except pursuant to court order.

For purposes of this Section 3, the term “Company” includes the Company and each of its affiliates. The term “Confidential Information” shall mean any and all confidential or proprietary information and materials, as well as all trade secrets, belonging to the Company and includes, regardless of whether such information or materials are expressly identified or marked as confidential or proprietary, and whether or not patentable: (i) technical information and materials of the Company; (ii) business information and materials of the Company; (iii) any information or material that gives the Company an advantage with respect to its competitors by virtue of not being known by those competitors; and (iv) other valuable, confidential information and materials and/or trade secrets of the Company.

4.Non-solicitation; Non-competition; Non-disparagement. In consideration for the Retention Award and continued access to Confidential Information, specialized training, and the Company’s business goodwill, you agree that:

(a)From the date hereof until the first anniversary of the date of the termination of your employment with the Company for any reason, you shall not, directly or indirectly, alone or in concert with others, solicit (either directly or indirectly by assisting others) the business of any customer of the Company with whom you had contact during the final two (2) years of your employment with the Company, or otherwise induce any such customer to change its relationship with the Company; and

(b)From the date hereof until the first anniversary of the date of the termination of your employment with the Company for any reason, you shall not, directly or indirectly, alone or in concert with others, solicit, recruit, hire, or attempt to solicit, recruit or hire any of the Company’s current or former employees with whom you had contact (which includes, but is not limited to, employees within your chain of command or under your supervisory authority) during the final two (2) years of your employment with the Company or otherwise induce any such current employee to terminate his or her employment with the Company; and

(c)From the date hereof until the first anniversary of the date of the termination of your employment with the Company for any reason, you shall not, on behalf of a Competitor, directly or indirectly (whether as an employee, employer, consultant, agent, principal, partner, equityholder, officer or director, or in any other representative capacity) engage in the Business at any location within the Restricted Area.

(d)From the date hereof and at all times following the termination of your employment with the Company for any reason, you shall not, and shall not induce others to, directly or indirectly, for yourself or on behalf of, or in conjunction with, any other person, persons, company, partnership, corporation, business entity, or otherwise, disparage, criticize, or defame the Company, its affiliates and their respective affiliates, directors, officers, agents, shareholders or employees, either publicly or privately, or make any statements that are inflammatory, detrimental, slanderous, or negative in any way to the interests of the Company or its affiliates; provided that nothing herein shall or shall be deemed to prevent or impair you from testifying truthfully in any legal or administrative proceeding if such testimony is compelled or requested (or otherwise complying with legal requirements).

(e)As used in this Section 4, the term “Company” shall mean the Company and any of its direct or indirect subsidiaries. If any one or more of the provisions contained in this Agreement shall for any reason be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect the remaining provisions of this Agreement, and the remaining provisions of this Agreement shall be construed as if such invalid, illegal, or unenforceable provision had never been contained in this Agreement. In the event the terms of this Section 4 shall be determined by any court of competent jurisdiction to be unenforceable by reason of its extending for too great a period of time or over too great a geographical area or by reason of its being too extensive in any other respect, it will be interpreted to extend only over the maximum period of time for which it may be enforceable, over the maximum geographical area as to which it may be enforceable, or to the maximum extent in all other respects as to which it may be enforceable, all as determined by such court in such action.

(f)Any breach or violation by you of the provisions of this Section 4 shall toll the running of any time periods set forth in this Section 4 for the duration of any such breach or violation. You recognize and acknowledge that a breach of the covenants contained in Section 4 will cause irreparable damage to the Company and its goodwill, the exact amount of which will be difficult or impossible to ascertain, and that the remedies at law for any such breach will be inadequate. Accordingly, you agree that in the event of a breach of any of the covenants contained in Section 4, in addition to any other remedy which may be available at law or in equity, the Company will be entitled to specific performance and injunctive relief.

(g)Section 4(c) of this agreement shall not apply to you in the event that your employment is terminated by (i) the Company without Cause or (ii) you for Good Reason.

5.Not a Contract of Employment. This Agreement is not a contract of employment and does not guarantee you employment for any specified period of time.

6.Waiver. No provisions of this Agreement may be modified, waived, or discharged unless such modification, waiver, or discharge is agreed to in writing signed by you and such officer (other than you) as may be specifically designated by the Company. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.

7.Choice of Law. This Agreement shall be governed by and construed in accordance with the laws of the state of Texas, without regard to conflicts of laws principles of such state, except where preempted by the Bankruptcy Code.

8.Section 409A. This Agreement is intended to comply with, or be exempt from Section 409A, and shall be construed and administered in accordance with Section 409A, so as not to subject you to the payment of any additional taxes, penalties, or interest imposed under Section 409A with respect to amounts paid under this Agreement or any other agreement or arrangement between the Company and you. The Company and you agree to amend this Agreement to the extent necessary to bring this Agreement into compliance with Section 409A (or to meet an exemption therefrom) as it may be interpreted by any regulations, guidance, or amendments to Section 409A issued or adopted after the date of this Agreement. Nothing in this Agreement shall be interpreted to permit (i) accelerated payment of nonqualified deferred compensation, as defined in Section 409A, (ii) any other payment in violation of the requirements of Section 409A, or (iii) you to designate the taxable year of any payment. No provision of this Agreement shall be interpreted or construed to transfer any liability for failure to comply with the requirements of Section 409A from you or any other individual to the Company or any affiliate, employee, or agent. All taxes imposed on or associated with payments made to you pursuant to this Agreement, including any liability imposed under Section 409A (but excluding the employer portion of any payroll taxes), shall be borne solely by you.

9.Entire Agreement. This Agreement contains all of the understandings and representations between the Company and you relating to the Retention Award and supersedes all prior and contemporaneous understandings, discussions, agreements, representations, and warranties, both written and oral, with respect to any retention awards.

10.Validity. The invalidity or unenforceability of any one or more provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.

11.Counterparts. This Agreement may be executed in one or more counterparts (including by facsimile), each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

12.Assignment; Change in Control. The provisions of this Agreement shall bind and inure to the benefit of the Company and its successors and assigns. The term “successors” as used in this Agreement shall include any corporation or other business entity which shall by merger, consolidation, purchase, or otherwise, acquire all or substantially all of the business and assets or ownership of the Company, and successors of any such corporations or other business entities. Where appropriate, the term “Company” as used in this Agreement shall also include any other successor that assumes the Agreement. Notwithstanding anything to the contrary herein, upon the occurrence of a “Change in Control” (as defined in the LTIP as in effect on the Effective Date) prior to the Retention Date, the Agreement shall terminate and you shall not be required to repay the Retention Award pursuant to Section 2 of this Agreement.

13.Release. In exchange for the promises of the Company set forth in this Agreement, the sufficiency of which you acknowledge, you, with the intention of binding yourself and your heirs, executors, administrators and assigns, do hereby release, remise, acquit and forever discharge the Company and its subsidiaries, its and their present and former officers, directors, executives, shareholders, agents, attorneys, employees and employee benefit plans (and the fiduciaries thereof), and the successors, predecessors and assigns of each of the foregoing (collectively, the “Company Released Parties”), of and from any and all claims, actions, causes of action, complaints, charges, demands, rights, damages, debts, sums of money, accounts, financial obligations, suits, expenses, attorneys’ fees and liabilities of whatever kind or nature in law, equity or otherwise, whether accrued, absolute, contingent, unliquidated or otherwise and whether now known or unknown, suspected or unsuspected, which you, individually or as a member of a class, now have, own or hold, or have at any time heretofore had, owned or held, arising on or prior to the date hereof, against any Company Released Party; provided that this Section 13 shall not waive your existing rights to (a) accrued and vested compensation or benefits, (b) any claims or rights arising after the Effective Date, or (c) indemnification and advancement of expenses, to the extent such rights exist as of the Effective Date, in connection with, arising from or related in any way to actions or omissions in your capacity as a director, officer, employee, agent or other capacity for the Company or any of its affiliates or any other entity at the direction of the Company or any of its affiliates, including, without limitation, indemnification and advancement of expenses pursuant to the Company’s bylaws, articles of incorporation or other policies or agreements.

14.Withholding of Taxes. The Company may withhold from any amounts payable under this Agreement all federal, state, city or other taxes as shall be required pursuant to any law or government regulation or ruling.

15.Other Benefits. The Retention Award is a special payment to you and is not intended to supersede or replace any other compensation payable to you, and will not be taken into account in computing the amount of salary or compensation for purposes of determining any bonus, incentive, pension or retirement, death, or other benefit under any bonus, incentive, pension or retirement, insurance, or other employee benefit plan of the Company, unless such plan or agreement expressly provides otherwise.

16.Legal Expenses. In the event of any claim, dispute, litigation, arbitration or other proceeding relating to Section 2, Section 4, or Section 13 of this Agreement in which the Company is the prevailing party, the Company shall be entitled to receive, and you shall pay upon demand, reasonable attorneys’ fees and related costs incurred by the Company in connection with the resolution of such claim, dispute, litigation, arbitration or other proceeding. If the Company is not the prevailing party in such a claim, dispute, litigation, arbitration or other proceeding, the Company shall pay you, upon demand, reasonable attorneys’ fees and related costs incurred by you in connection with the resolution of such claim, dispute, litigation, arbitration or other proceeding.

{Signature page follows.}

Please indicate your acknowledgment of and acceptance of the terms of this Agreement by signing in the space indicated below and returning a signed copy of this Agreement to me no later than [__]. The one time, lump sum advance, will be paid upon the Company’s receipt of your signed acknowledgment. Please feel free to contact me should you wish to discuss any aspect of this Agreement or the Retention Award.

Congratulations on receiving this award and I look forward to your contribution to the Company’s success.

Sincerely,

Pioneer Energy Services Corp.

____________________________________

Name:

Title:

Accepted, Acknowledged and Agreed:

_______________________________

Name:

Date:

Exhibit A

Certain Definitions

For purposes of this Agreement, the following terms shall have the meanings set forth below:


•	“Business” means the business of land contract drilling services or production services, and any other business that you know or should know that the Company or any of its direct or indirect subsidiaries has taken material steps to engage in.

•

“Cause” means (A) any conviction of, or plea of guilty or nolo contendere to (i) any felony (except for vehicular-related felonies, other than manslaughter or homicide) or (ii) any crime (whether or not a felony) involving dishonesty, fraud, or breach of fiduciary duty; (B) willful misconduct by you in connection with the performance of services to the Company; (C) ongoing failure or refusal after written notice, other than by reason of Disability or ill health, to faithfully and diligently perform the usual and customary duties of your employment; (D) failure or refusal after written notice to comply with the reasonable written policies, standards and regulations of the Company which, from time to time, may be established and disseminated; or (E) a material breach by you of any terms related to your employment in any applicable agreement; provided that the conduct described in clauses (C) through (E) shall not constitute Cause unless the Company has provided you with written notice of such conduct within ninety (90) days of any officer of the Company (other than you) having knowledge of such conduct, and you fail to cure such conduct within thirty (30) days of receiving such notice.

•

“Competitor” means any corporation, partnership or other business organization or entity that engages in, or that owns a significant interest in an entity that engages, directly or indirectly in, the Business in competition with the Company or any of its direct or indirect subsidiaries. As of the Effective Date, the definition of Competitor includes, by way of example and not by way of limitation, the following entities: Basic Energy Services, Inc.; C&J Energy Services; Helmerich & Payne, Inc.; Key Energy Services, Inc.; Nabors Industries, Ltd.; Parker Drilling Company; Patterson-UTI Energy, Inc., Precision Drilling Corporation; and Superior Energy Services.


•	“Disability” shall occur when you are entitled to receive payments under the Company’s long-term disability insurance plan, if one is in effect at the time. If there is no long term disability insurance plan in effect, then Disability shall occur when you are unable to perform your duties hereunder as a result of illness or mental or physical injury for a period of at least 180 days.

•

“Good Reason” shall occur when (A) one of the following (each, a “Resignation Condition”) has occurred: (i) a material breach by the Company of this Agreement, (ii) any material reduction in your annualized base salary, (iii) the relocation of your principal place of employment that would increase your one-way commute by more than fifty (50) miles, or (iv) a material diminution in your authority, duties, or responsibilities; (B) you have given the Company written notice of the occurrence of the Resignation Condition within ninety (90) days after the Resignation Condition first occurred; (C) the Company has not cured the Resignation Condition within thirty (30) days of receiving the notice from you required by clause (B) of this paragraph; and (D) your termination of employment for “Good Reason” occurs on the later of (i) ninety (90) days after the Resignation Condition first occurred or (ii) 10 days after the thirty (30) day period if, in the event of (D)(i) or (D)(ii), the Company has not cured such Resignation Condition.


•	“LTIP” means the Company’s Amended and Restated 2007 Incentive Plan, as amended.


•	“Restricted Area” means any state of the United States and any foreign country where the Company or any of its direct or indirect subsidiaries engages in the Business.

Exhibit 10.2

PIONEER ENERGY SERVICES CORP.

2019 EMPLOYEE INCENTIVE PLAN

1.Purpose. This Pioneer Energy Services Corp. 2019 Employee Incentive Plan (the “Plan”) is designed to align the interests of Pioneer Energy Services Corp. (the “Company”) and certain select employees of the Company and its subsidiaries (collectively, the “Company Group”).

2.Adoption of the Plan. The Company, intending to be legally bound, hereby adopts the Plan effective as of October 1, 2019 (the “Effective Date”). The Plan shall be in effect from the Effective Date and shall continue until the earlier of (a) the date the Plan is terminated by the Company in accordance with Section 7(f) or (b) December 31, 2020, subject, in each case, to the satisfaction of all obligations of the Company or its successor entities hereunder.

3.Definitions. For purposes of the Plan:

(a)“Adjusted EBITDA” means income (loss) before interest expense, income tax (expense) benefit, depreciation and amortization, impairment, and any loss on extinguishment of debt, each as determined in accordance with past practice and as may be adjusted by the Administrator from time-to-time to exclude extraordinary or one-time events and to exclude classes of expenses that were not taken into account in setting the Adjusted EBITDA Performance Goal.

(b)“Administrator” means the Committee.

(c)“Annual Performance Bonus” means an annual incentive bonus opportunity granted to a Participant under Section 5(b).

(d)“Award Letter” means a letter agreement evidencing the award of an Annual Performance Bonus, a Quarterly Performance Bonus or a Regular Quarterly Bonus under the Plan and specifying any additional terms and conditions with respect thereto, as determined by the Administrator in its sole discretion consistent with the terms of the Plan.

(e)“Board” means the Company’s Board of Directors.

(f)“Bonus Eligible Salary” means, with respect to any Performance Period, a Participant’s actual earned base salary for such Performance Period, excluding any allowances, supplements or other non-ordinary course or similar amounts paid to such Participant (as determined by the Administrator).

(g)“Cause” means, with respect to a Participant, such Participant’s (i) conviction of, or plea of guilty or nolo contendere to (A) any felony (except for vehicular-related felonies, other than manslaughter or homicide) or (B) any crime (whether or not a felony) involving dishonesty, fraud, or breach of fiduciary duty; (ii) willful misconduct in connection with the performance of services to the Company Group; (iii) ongoing failure or refusal after written notice, other than by reason of Disability or ill health, to faithfully and diligently perform the usual and customary duties of Participant’s employment; (iv) failure or refusal after written notice to comply with the reasonable written policies, standards and regulations of the Company which, from time to time, may be established and disseminated; or (v) material breach of any terms related to the Participant’s employment in any applicable agreement; provided that the conduct described in clauses (iii) through (v) shall not constitute Cause unless the Company has provided Participant with written notice of such conduct within ninety (90) days of any officer of the Company (other than the Participant) having knowledge of such conduct, and Participant fails to cure such conduct within thirty (30) days of receiving such notice.

(h)“Code” means the Internal Revenue Code of 1986, as amended.

(i)“Commencement Date” means the date on which a Participant commences participation in the Plan, as set forth in his or her Award Letter or otherwise communicated to such Participant.

(j)“Committee” means the Compensation Committee of the Board; provided, however, that the Board, in its sole discretion, may at any time and from time to time exercise any and all rights and duties of the Committee under the Plan.

(k)“Company Group” has the meaning set forth in Section 1.

(l)“Disability” means a permanent and total disability within the meaning of Section 22(e)(3) of the Code.

(m)“Fiscal Quarter” means each calendar quarter beginning on or after October 1, 2019.

(n)“Participant” has the meaning set forth in Section 4.

(o)“Performance Bonus” means an Annual Performance Bonus or a Quarterly Performance Bonus.

(p)“Performance Goals” means the goals for the Performance Metrics as established by the Administrator for each Performance Period and set forth in the Award Letter or otherwise communicated to each Participant.

(q)“Performance Metric” means the specific performance criteria used in determining the Performance Goals. Performance Metrics may include, without limitation, Adjusted EBITDA, safety metrics (including, without limitation, total recordable incident rate (TRIR)), or any other performance criteria determined by the Administrator in its sole discretion, and, in each case, may be based on the Company as a whole or any individual business or division (or group of businesses or divisions) thereof and may be calculated based on applicable accounting principles or such other methodology as determined appropriate by the Administrator. The Administrator may, in its discretion, adjust any Performance Metric on a pro forma basis or otherwise to take into account (x) any acquisitions or dispositions consummated during any Performance Period or otherwise affecting the Performance Goals, (y) any material change in the Company’s business plan or (z) any other event or circumstance as determined appropriate. The determination of the Performance Metrics (and calculations thereof) and any adjustments thereto by the Administrator shall be final, conclusive and binding on all Participants and other persons.

(r)“Performance Period” means: (a) in the case of a Quarterly Performance Bonus, each Fiscal Quarter; and (b) in the case of an Annual Performance Bonus, each calendar year beginning with the 2019 calendar year.

(s)“Quarterly Performance Bonus” means a quarterly incentive bonus opportunity granted to a Participant under Section 5(a).

(t)“Regular Quarterly Bonus” or “Quarterly Bonus” means, in the case of any Participant, the quarterly bonus, if any, payable to such Participant under Section 6 in respect of the applicable Fiscal Quarter.

(u)“Section 409A” means Section 409A of the Code.

(v)“Stretch Performance” means the Performance Goal established for maximum or “stretch” performance as established by the Administrator for any Performance Period and set forth in the Award Letter or otherwise communicated to each Participant.

(w)“Target Bonus” means, with respect to a Participant, such Participant’s target Performance Bonus opportunity for a Performance Period. A Participant’s Target Bonus amount shall be determined by the Administrator in its discretion and shall equal a percentage of the Participant’s Bonus Eligible Salary. A Participant’s Target Bonus shall be set forth in the Participant’s Award Letter.

(x)“Target Performance” means the Performance Goal established for target performance as established by the Administrator for any Performance Period and set forth in the Award Letter or otherwise communicated to each Participant.

(y)“Threshold Performance” means the Performance Goal established for threshold performance as established by the Administrator for any Performance Period and set forth in the Award Letter or otherwise communicated to each Participant.

4.Eligible Participants. Each employee of the Company Group designated by the Administrator from time to time shall be a “Participant” under the Plan effective as of such Participant’s Commencement Date. To the extent any employee of the Company is a Participant, he or she will not be eligible to participate in any other form of incentive or bonus plan provided by the Company other than any retention plans.

5.Performance Bonuses. Unless otherwise determined by the Administrator:

(a)Quarterly Performance Bonus Opportunity. Each Participant selected by the Administrator to receive a Quarterly Performance Bonus shall be eligible to receive a Quarterly Performance Bonus for each Performance Period with a bonus opportunity equal to his or her Target Bonus. The amount of the Quarterly Performance Bonus shall be determined based upon achievement of the applicable Performance Goals and may be allocated among such Performance Goals as determined by the Administrator; provided that the Administrator may, in its sole discretion, reduce the amount of any Quarterly Performance Bonus to take into account individual Participant performance and/or objective attainment. With respect to each Performance Goal, a Participant shall be eligible to receive, (i) upon achievement of Threshold Performance, 50% of the Target Bonus allocable to such Performance Goal, (ii) upon achievement of Target Performance, 100% of the Target Bonus allocable to such Performance Goal, and (iii) upon achievement of Stretch Performance, 150% (or such other percentage determined appropriate by the Administrator) of the Target Bonus allocable to such Performance Goal (with payments for performance between Threshold Performance and Target Performance, or between Target Performance and Stretch Performance, calculated on the basis of straight-line interpolation). Notwithstanding the foregoing, (A) each Participant who commences employment with the Company Group in, or is promoted or transferred within the Company Group to, a position selected to participate in the Plan during a Performance Period and receive a Quarterly Performance Bonus shall be eligible to receive a prorated Quarterly Performance Bonus for such Performance Period based on such person’s Commencement Date (and, to the extent promoted or transferred between eligible positions, the Quarterly Performance Bonus (and any Performance Goals or other terms and conditions related thereto) will be adjusted to reflect the change in position as determined appropriate by the Administrator (including, without limitation, prorating the Quarterly Performance Bonus among multiple Performance Goals and Performance Metrics, as appropriate)); and (B) each Participant who remains employed by the Company Group, but is demoted or transferred within the Company Group to a position otherwise ineligible to participate in the Plan during a Performance Period, shall be eligible to receive a prorated Quarterly Performance Bonus based on the period during such Performance Period in which he or she was eligible to participate in the Plan and receive Quarterly Performance Bonus.

(b)Annual Performance Bonus Opportunity. Each Participant selected by the Administrator to receive an Annual Performance Bonus shall be eligible to receive an Annual Performance Bonus for each Performance Period with a bonus opportunity equal to his or her Target Bonus. The amount of the Annual Performance Bonus shall be determined based upon achievement of the applicable Performance Goals and may be allocated among such Performance Goals as determined by the Administrator; provided that the Administrator may, in its sole discretion, reduce the amount of any Annual Performance Bonus to take into account individual Participant performance and/or objective attainment. With respect to each Performance Goal, a Participant shall be eligible to receive, (i) upon achievement of Threshold Performance, 50% of the Target Bonus allocable to such Performance Goal, (ii) upon achievement of Target Performance, 100% of the Target Bonus allocable to such Performance Goal, and (iii) upon achievement of Stretch Performance, 150% (or such other percentage determined appropriate by the Administrator) of the Target Bonus allocable to such Performance Goal (with payments for performance between Threshold Performance and Target Performance, or between Target Performance and Stretch Performance, calculated on the basis of straight-line interpolation). Notwithstanding the foregoing and except as otherwise set forth in an Award Letter, (A) each Participant who commences employment with the Company Group in, or is promoted or transferred within the

Company Group to, a position selected to participate in the Plan during a Performance Period and receives an Annual Performance Bonus shall be eligible to receive a prorated Annual Performance Bonus for such Performance Period based on such person’s Commencement Date (and, to the extent promoted or transferred between eligible positions, the Annual Performance Bonus (and any Performance Goals or other terms and conditions related thereto) will be adjusted to reflect the change in position as determined appropriate by the Administrator (including, without limitation, prorating the Annual Performance Bonus among multiple Performance Goals and Performance Metrics, as appropriate)); and (B) each Participant who remains employed by the Company Group, but is demoted or transferred within the Company Group to a position otherwise ineligible to participate in the Plan during a Performance Period, shall be eligible to receive a prorated Annual Performance Bonus based on the period during such Performance Period in which he or she was eligible to participate in the Plan and receive an Annual Performance Bonus.

(c)Performance Bonus Payments.

(i)Subject to the provisions of the Plan (including Section 5(d)) and any Award Letter, each Participant shall be eligible to receive his or her Performance Bonus based upon the extent to which the Performance Goals have been achieved for the applicable Performance Period. Promptly after the end of a Performance Period and as soon thereafter as financials for the Performance Period are estimable, the Administrator shall certify the degree to which the applicable Performance Goals have been achieved and the amount of the Performance Bonus payable to each Participant hereunder. Any Performance Bonus required to be made under the Plan shall be paid in cash, by the applicable member of the Company Group, in the calendar month following the end of the applicable Performance Period and in any event not later than thirty (30) days after the end of the applicable Performance Period. Except as otherwise may be provided by the Administrator, in its sole discretion, no Performance Bonus shall be payable in respect of a Performance Period unless the Threshold Performance has been achieved for such Performance Period.

(d)Termination of Employment.

(i)In order to earn a Performance Bonus for a Performance Period, a Participant must remain actively employed by the Company Group (and not have been provided or received any notice of termination of employment with the Company Group) through the date on which such Performance Bonus is paid. For the avoidance of doubt except as set forth in Section 5(d)(ii), a Participant whose employment with the Company Group terminates for any reason (including the Participant’s resignation) before the payment date of a Performance Bonus shall forfeit the right to such Performance Bonus.

(ii)Notwithstanding Section 5(d)(i), if the employment of a Participant is terminated due to such Participant’s Disability or death or termination by the Company Group without Cause (and as of the date of termination (the “Termination Date”) such Participant was otherwise eligible to receive a Performance Bonus), the Participant (A) will continue to be eligible to receive payment of any Performance Bonus for any Performance Period ending prior to the Termination Date, payable in accordance with, as applicable, Section 5(a) or Section 5(b); provided that such Participant will not be entitled to any such payments to the extent that, on or following the Termination Date, he or she breaches any written agreement with any member of the Company Group.

6.Regular Quarterly Bonuses. Unless otherwise determined by the Administrator:

(a)Regular Quarterly Bonus Opportunity. Each Participant selected by the Administrator to receive a Regular Quarterly Bonus shall be eligible to receive a Regular Quarterly Bonus for a Fiscal Quarter with a bonus opportunity equal to a percentage of the Participant’s Bonus Eligible Salary as determined by the Administrator. Notwithstanding the foregoing, (A) each Participant who commences employment with the Company Group in, or is promoted or transferred within the Company Group to, a position selected to participate in the Plan and receive a Regular Quarterly Bonus during a Fiscal Quarter shall be eligible to receive a prorated Regular Quarterly Bonus for such Fiscal Quarter based on such person’s Commencement Date (and, to the extent promoted or transferred between eligible positions, the Regular Quarterly Bonus (and any other terms and conditions related thereto) will be adjusted to reflect the change in position as determined appropriate by the Administrator; and (B) each Participant who remains employed by the Company Group, but is demoted or transferred within the Company Group to a position otherwise ineligible to participate in the Plan during a Fiscal Quarter, shall be eligible to receive a prorated Regular Quarterly

Bonus based on the period during such Fiscal Quarter in which he or she was eligible to participate in the Plan and receive a Regular Quarterly Bonus.

(b)Payment of Regular Quarterly Bonuses.

(i)Subject to the provisions of the Plan (including Section 6(c)) and any Award Letter, any Regular Quarterly Bonus required to be paid under the Plan shall be paid in cash by the applicable member of the Company Group, in the calendar month following the end of the applicable Fiscal Quarter and in any event not later than thirty (30) days after the end of the applicable Fiscal Quarter.

(c)Termination of Employment.

(i)In order to earn a Regular Quarterly Bonus for a Fiscal Quarter, a Participant must remain actively employed by the Company Group (and not have been provided or received any notice of termination of employment with the Company Group) through the date on which such Regular Quarterly Bonus is paid. For the avoidance of doubt except as set forth in Section 6(c)(ii), a Participant whose employment with the Company Group terminates for any reason (including the Participant’s resignation) before the payment date of a Regular Quarterly Bonus shall forfeit the right to such Regular Quarterly Bonus.

(ii)Notwithstanding Section 6(c)(i), if the employment of a Participant is terminated due to such Participant’s Disability or death or termination by the Company Group without Cause (and as of the Termination Date such Participant was otherwise eligible to receive a Regular Quarterly Bonus), the Participant (A) will continue to be eligible to receive payment of any Regular Quarterly Bonus for any Fiscal Quarter ending prior to the Termination Date, payable in accordance with Section 6(b); provided that such Participant will not be entitled to any such payments to the extent that, on or following the Termination Date, he or she breaches any written agreement with any member of the Company Group.

7.Plan Administration.

(a)The Plan shall be administered by the Administrator. The Administrator is given full authority and discretion within the limits of the Plan to establish such administrative measures as may be necessary to administer and attain the objectives of the Plan. The Administrator (or its delegate, as applicable) shall have full power and authority to construe and interpret the Plan, and any good faith interpretation by the Administrator (including, without limitation, any determination as to Disability, termination of employment and nature thereof, “active employment,” Performance Goal achievement, bonus levels and adjustments, and payment timing) shall be binding on all Participants and shall be accorded the maximum deference permitted by law.

(b)All rights and interests of Participants under the Plan shall be non-assignable and nontransferable, and otherwise not subject to pledge or encumbrance, whether voluntary or involuntary, other than by will or by the laws of descent and distribution. In the event of any sale, transfer or other disposition of all or substantially all of the Company’s assets or business, whether by merger, stock sale, consolidation or otherwise, the Company may assign the Plan and all obligations hereunder.

(c)The Company may deduct all applicable taxes and any other withholdings required to be withheld with respect to the payment of any award pursuant to the Plan. The Company is not making any warranties or representations to any Participant with respect to the income tax consequences of the grant or payment of any amount payable hereunder and no Participant is in any manner relying on the Company or any of its representatives for an assessment of such tax consequences. Each Participant is hereby advised to consult with his or her own tax advisor with respect to any tax consequences associated with the amounts payable hereunder. The Company shall not be required to establish any special or separate fund or to make any other segregation of assets to ensure the payment of any award provided for hereunder.

(d)Any payment to a Participant in accordance with the provisions of the Plan shall, to the extent thereof, be in full satisfaction of all claims against the Company Group, and the Company may require the Participant,

as a condition precedent to such payment, to execute a receipt and release to such effect. Any payments to a Participant in accordance with the provisions of the Plan shall be subject to any clawback or similar policy adopted by the Company pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act or otherwise, and any rules and regulations promulgated thereunder.

(e)Regular Quarterly Bonuses and Performance Bonuses shall not be considered as extraordinary, special incentive compensation, and will not be included as “earnings,” “wages,” “salary,” or “compensation” in any pension, welfare, life insurance, or other employee benefit plan or arrangement of the Company Group.

(f)The Administrator, in its sole discretion, shall have the right to modify, supplement, suspend or terminate the Plan at any time, with or without cause and without the consent of any person (including, for avoidance of doubt, any Participant); provided that, except as otherwise specified in an Award Letter, in no event shall any amendment or termination adversely affect the rights of a Participant under any theretofore granted Performance Bonus or Regular Quarterly Bonus without the prior written consent of such Participant.

(g)Nothing contained in the Plan shall in any way affect the right and power of the Company Group to discharge any Participant or otherwise terminate his or her employment at any time or for any reason or to change the terms of his or her employment in any manner.

(h)Captions preceding the sections hereof are inserted solely as a matter of convenience and in no way define or limit the scope or intent of any provision hereof.

(i)The administration of the Plan shall be governed by the laws of the State of Texas, without regard to the conflict of law principles of any state. Any persons or corporations who now are or shall subsequently become parties to the Plan shall be deemed to consent to this provision.

(j)Neither the Plan nor any interpretation, determination or other action taken or omitted to be taken pursuant to the Plan shall be construed as guaranteeing a Participant’s employment with the Company Group, a discretionary bonus or any particular level of bonus, compensation or benefits or as giving a Participant any right to continued employment, during any period, nor shall they be construed as giving a Participant any right to be reemployed by the Company Group following any termination of employment.

(k)The Plan is an unfunded incentive plan. Each Participant is an unsecured general creditor of the Company with respect to all obligations owed under the Plan. Amounts payable under the Plan shall be satisfied solely out of the general assets of the Company, subject to the claims of its creditors. A Participant will not have any interest in any fund or in any specific asset of the Company Group of any kind by reason of a Participant’s participation in the Plan.

8.Section 409A.

(a)The Plan is intended to either comply with, or be exempt from, the requirements of Section 409A. To the extent that the Plan is not exempt from the requirements of Section 409A, the Plan is intended to comply with the requirements of Section 409A and shall be limited, construed and interpreted in accordance with such intent. Each Participant’s right to receive any installment payments under the Plan shall be treated as a right to receive a series of separate payments and, accordingly, each such installment payment shall at all times be considered a separate and distinct payment as permitted under Section 409A. Notwithstanding the foregoing, in no event whatsoever shall the Company Group be liable for any additional tax, interest, income inclusion or other penalty that may be imposed on a Participant by Section 409A or for damages for failing to comply with Section 409A.

(b)Notwithstanding anything in the Plan to the contrary, any compensation or benefits payable under the Plan that is considered nonqualified deferred compensation under Section 409A and is designated under the Plan as payable upon the Participant’s termination of employment shall be payable only upon the Participant’s “separation from service” with the Company within the meaning of Section 409A (a “Separation from Service”).

(c)Notwithstanding anything in the Plan to the contrary, if the Participant is deemed by the Company at the time of the Participant’s Separation from Service to be a “specified employee” for purposes of Section 409A, to the extent delayed commencement of any portion of the benefits to which the Participant is entitled under the Plan is required in order to avoid a prohibited distribution under Section 409A, such portion of the Participant’s benefits shall not be provided to the Participant prior to the earlier of (A) the expiration of the six (6)-month period measured from the date of the Participant’s Separation from Service with the Company or (B) the date of the Participant’s death. Upon the first business day following the expiration of the applicable Section 409A period, all payments deferred pursuant to the preceding sentence shall be paid in a lump sum to the Participant (or the Participant’s estate or beneficiaries), and any remaining payments due to Participant under the Plan shall be paid as otherwise provided herein.

IN WITNESS WHEREOF, the Company has caused the Plan to be adopted and signed by its duly authorized officer as of the date first set forth above.



Pioneer Energy Services Corp.
By:	/s/ Bryce T. Seki
Title:	VP - General Counsel

Exhibit 10.3

PIONEER ENERGY SERVICES CORP.

2019 EMPLOYEE INVENTIVE PLAN

Form Bonus Award Letter

September __, 2019

Via Hand Delivery

{Name}

{Title}

Pioneer Energy Services Corp.

Re: Award Letter under the Pioneer Energy Services Corp. 2019 Employee Incentive Plan

Dear {Name}:

We are pleased to inform you that you have been selected to receive a Quarterly Performance Bonus under the Pioneer Energy Services Corp. (the “Company”) 2019 Employee Incentive Plan (as it may be amended, the “Plan”). Terms used herein with initial capital letters have the meanings set forth in the Plan, and this Award Letter shall be in all respects subject to the terms and conditions of the Plan. Certain terms and conditions of your Quarterly Performance Bonus are set forth below under “Quarterly Performance Bonus”.

In addition, based on the implementation of the Plan, the Board has elected to terminate the Company’s existing 2019 cash incentive plan and has decided to temporarily suspend the grant of long-term incentive awards under the Company’s Amended and Restated 2007 Incentive Plan (the “LTIP”). In light of these changes, and as a replacement for your existing 2019 cash incentive compensation opportunity, in addition to your Quarterly Performance Bonus the Board has approved the payment to you of a special incentive bonus (the “Special Incentive Bonus”) in the amount of ${______}. The terms and conditions of your Special Incentive Bonus are set forth below under “Special Incentive Bonus”.

I. Quarterly Performance Bonus

1.Target Bonus Amount. Your Target Bonus amount in respect of each Performance Period during the term of the Plan (i.e., each calendar quarter beginning on or after October 1, 2019 (the “Effective Date”)) shall be {___}% of your Bonus Eligible Salary (i.e., your actual earned salary for the Performance Period, excluding any allowances, supplements or other non-ordinary course or similar amounts paid to you). Your Quarterly Performance Bonus opportunity was determined by the Company based on your expected total compensation, job responsibilities, and expected job performance.

2.Quarterly Performance Bonus Performance Goals.

(a)The amount of each Quarterly Performance Bonus will be determined by the Administrator based on the achievement of Performance Goals established under the Plan and communicated to you prior to the start of each Performance Period. For the Performance Period that begins on the Effective Date and ends on December 31, 2019, your Quarterly Performance Bonus payment will be determined based on the Performance Goals approved by the Administrator and communicated to you on or before the Effective Date.

(b)Performance falling between Threshold and Target or between Target and Stretch will be linearly interpolated. Each of the Performance Goals is free standing, meaning that you will be able to earn a payout based upon the achievement of one goal, even if the Threshold Performance level is not achieved in the other goal. The Administrator has the right to make changes and adjustments to the Performance Goals to

take into account unusual or non-recurring events, including, without limitation: changes in tax and accounting rules and regulations; extraordinary gains and losses; mergers and acquisitions; purchases or sales of substantial assets; and such other factors as the Administrator determines in its reasonable discretion.

(c)Determination of the Company’s performance and the amount of your Quarterly Performance Bonus will be made by the Administrator in its discretion. Such determination shall be made within thirty (30) days following the end of each Performance Period, with payment of your earned Quarterly Performance Bonus (if any) made in a single lump sum cash payment, less applicable withholdings and deductions, within forty-five (45) days following the end of the Performance Period.

3.Termination. Except as otherwise provided in the Plan, you must be employed by the Company on the date of payment of the Quarterly Performance Bonus to receive the Quarterly Performance Bonus.

4.Acknowledgments. By accepting this Quarterly Performance Bonus award, you acknowledge that (a) you have received, read and understand the terms and conditions set forth in this Award Letter and the Plan, and (b) the Company may amend or terminate your Quarterly Performance Bonus or the Plan at any time and for any reason; provided, however, that any reduction to your Target Bonus percentage in Section 1 above shall not take effect until the first day of the calendar quarter that begins coincident with or immediately following the date of such reduction. You further acknowledge that you understand that the Quarterly Performance Bonus and all other incentive awards granted by the Company are entirely discretionary and that no right to receive the Quarterly Performance Bonus, or any incentive award, absent a written agreement to the contrary.

II. Special Incentive Bonus

1.Special Incentive Bonus Terms. The Special Incentive Bonus will be paid in a single lump sum, less applicable withholdings and deductions, subject to and upon the Company’s receipt of a signed copy of this Award Letter. Notwithstanding anything in this Award Letter to the contrary, if, prior to April 1, 2020, you voluntarily resign from the Company or your employment with the Company is terminated by the Company for Cause, then, in either case, you will promptly (but in no event more than thirty (30) days following your termination) repay to the Company 100% of the Special Incentive Bonus (less the amount of any applicable withholdings and deductions).

2.Forfeiture of Certain LTIP Awards. In consideration of the Special Incentive Bonus, you hereby acknowledge and agree, on behalf of yourself and your successors, to irrevocably and immediately forfeit and cancel all long-term cash incentive awards previously granted to you under the LTIP and outstanding as of the date hereof (the “Forfeited LTIP Awards”). For the avoidance of doubt, this Award Letter renders the Forfeited LTIP Awards null and void and of no effect and you shall not be entitled to payment of any amounts under such Forfeited LTIP Awards on or after the date of this Award Letter.

3.Acknowledgements. By accepting this Special Incentive Bonus, you acknowledge that you have received, read and understand the terms and conditions set forth in this Award Letter.

4.Amendment. The terms of your Special Incentive Bonus may not be amended or modified other than by a written agreement executed by you and the Company, nor may any provision hereof be waived other than by a writing executed by you and the Company.

III. Miscellaneous

1.Entire Agreement. This Award Letter and the documents referred to herein or delivered pursuant hereto, which form a part hereof, contain the entire understanding of the parties with respect to the subject matter hereof and thereof. There are no restrictions, agreements, promises, representations, warranties, covenants or undertakings with respect to the subject matter hereof other than those expressly set forth herein and therein. This Award Letter supersedes all prior agreements and understandings between the parties with respect to such subject matter.

2.Governing Law/Counterparts. The validity, construction, and effect of this Award Letter shall be determined in accordance with the laws of the state of Texas. This Award Letter may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

{Signature page follows.}

Please review these terms to make sure they are consistent with your understanding. If so, please send a signed copy of this Award Letter to {Name}, {Title}, {email} no later than [five (5)] business days after your receipt of this letter.

If you have any questions regarding the Quarterly Performance Bonus or the Special Incentive Bonus, please contact {Name}, {Title}, Pioneer Energy Services Corp., at (___) ___-____.

Very truly yours,

Pioneer Energy Services Corp.

________________________________________

By:

Its:

I have read and accept the terms of the Award as set forth in this Award Letter:

Signature of {Name}

Dated: {Date}