UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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): June 15, 2005
PATTERSON-UTI ENERGY, INC.
Delaware
(State or other jurisdiction of incorporation) |
0-22664
(Commission File Number) |
75-2504748
(I.R.S. Employer Identification No.) |
4510 Lamesa Hwy.
Snyder, Texas |
79549 | |
(Address of principal executive offices) | (Zip Code) |
Registrants telephone number, including area code: (325) 574-6300
Former name or former address, if changed since last report: Not Applicable
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:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement.
On April 19, 2005, the Board of Directors of Patterson-UTI Energy, Inc., a Delaware corporation (the Company), adopted the Patterson-UTI Energy, Inc. 2005 Long-Term Incentive Plan (the 2005 Plan), subject to approval by the Companys stockholders. In addition, on the same date, the Board of Directors approved, subject to and effective upon the approval by the Companys stockholders of the 2005 Plan, the termination of any future grants under all existing equity plans of the Company.
On June 15, 2005, the Companys stockholders approved the adoption of the 2005 Plan. Directors and certain employees (including officers), prospective employees, consultants and advisors of the Company and its subsidiaries are eligible for awards under the 2005 Plan. The 2005 Plan provides for awards of non-qualified stock options, incentive stock options, tandem and independent stock appreciation rights (SARs), restricted stock awards, other stock unit awards, performance awards and dividend equivalents. The 2005 Plan is administered by the Compensation Committee of the Companys Board of Directors.
Subject to adjustments, the total number of shares of common stock for which awards may be granted under the 2005 Plan is 6,250,000, reduced by the total number of shares of common stock subject to any options or awards granted under other existing equity plans of the Company between January 1, 2005 and June 15, 2005. Generally, if an award granted under the Plan or the other existing equity plans of Company expires, is forfeited, is settled in cash or otherwise terminates without the issuance of all or a portion of the shares of common stock subject to the award, the shares allocable to the expired, forfeited, cash settled or terminated portion of the award will be added to the number of shares available for awards under the 2005 Plan. If any shares of common stock subject to an award are used to exercise options, are not issued upon the settlement of a stock appreciation right, or are withheld by the Company or its subsidiaries for income or employment taxes, the shares will not become available for grant under the 2005 Plan. Any shares that are subject to awards of options or stock appreciation rights will be counted against this limit as one (1) share for every one (1) share granted, and any shares that are subject to awards other than options or stock appreciation rights will be counted against this limit as one and six tenths (1.6) shares for every one (1) share awarded. For performance unit awards granted under the 2005 Plan that are denominated in dollars, the number of shares that will be counted against this limit will be an amount equal to the quotient of (i) the dollar amount in which the performance unit is denominated, divided by (ii) the fair market value of a share on the date the performance unit is granted. Any shares of common stock that are added to the number of shares available for grant again under the 2005 Plan will be added back as one (1) share if the shares were subject to options or stock appreciation rights, and as one and six tenths (1.6) shares if the shares were subject to awards other than options or stock appreciation rights.
Under the 2005 Plan, no participant may be granted options or SARs during any 12-month period with respect to more than 1,000,000 shares of Common Stock or restricted stock, performance awards and/or other stock unit awards that are denominated in shares in any 12-month period with respect to more than 500,000 shares. In addition to the foregoing limits, the maximum dollar value payable to any participant in any 12-month period with respect to performance awards is $5,000,000.
Item 8.01. Other Events.
The Company hereby amends the discussion under the caption Description of Registrants Securities to be Registered in the Companys registration statement on Form 8-A, which became effective November 2, 1993. The amended description is set forth as Exhibit 99.1 to this Current Report on Form 8-K, and is incorporated herein by reference.
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Item 9.01. Financial Statements and Exhibits.
(c) Exhibits
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Exhibit No.
Description
10.1
99.1
Table of Contents
SIGNATURES
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.
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PATTERSON-UTI ENERGY, INC.
Dated: June 21, 2005
By:
/s/ Jonathan D. Nelson
Jonathan D. Nelson
Vice President, Chief Financial Officer, Secretary and Treasurer
Table of Contents
Exhibit Index
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Exhibit No.
Description
10.1
99.1
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2
3
4
5
(a) Upon the exercise of a Stock Appreciation Right, the holder shall have the right to receive the excess of (i) the Fair Market Value of one Share on the date of exercise or such other amount as the Committee shall so determine at any time during a specified period before the date of exercise over (ii) the grant price of the right on the date of grant, or in the case of a Tandem Stock Appreciation Right granted on the date of grant of the related Option, as specified by the Committee in its sole discretion, which, except in the case of Substitute Awards or in connection with an adjustment provided in Section 12.2, shall not be less than the Fair Market Value of one Share on such date of grant of the right or the related Option, as the case may be. | |
(b) Upon the exercise of a Stock Appreciation Right, payment shall be made in whole Shares. | |
(c) Any Tandem Stock Appreciation Right may be granted at the same time as the related Option is granted or at any time thereafter before exercise or expiration of such Option. | |
(d) Any Tandem Stock Appreciation Right related to an Option may be exercised only when the related Option would be exercisable and the Fair Market Value of the Shares subject to the related Option exceeds the option price at which Shares can be acquired pursuant to the Option. In addition, (i) if a Tandem Stock Appreciation Right exists with respect to less than the full number of Shares covered by a related Option, then an exercise or termination of such Option shall not reduce the number of Shares to which the Tandem Stock Appreciation Right applies until the number of Shares then exercisable under such Option equals the number of Shares to which the Tandem Stock Appreciation Right applies, and (ii) no Tandem Stock Appreciation Right granted under the Plan to a person then subject to Section 16 of the Exchange Act shall be exercised during the first six months of its term for cash, except as provided in Article 11. | |
(e) Any Option related to a Tandem Stock Appreciation Right shall no longer be exercisable to the extent the Tandem Stock Appreciation Right has been exercised. | |
(f) The provisions of Stock Appreciation Rights need not be the same with respect to each recipient. | |
(g) The Committee may impose such other conditions or restrictions on the terms of exercise and the exercise price of any Stock Appreciation Right, as it shall deem appropriate, including providing that the exercise price of a Tandem Stock Appreciation Right may be less than the Fair Market Value on the date of grant if the Tandem Stock Appreciation Right is added to an Option following the date of the grant of the Option. Notwithstanding the foregoing provisions of this Section 6.2(g), but subject to Section 12.2, a Freestanding Stock Appreciation Right shall generally have the same terms and conditions as Options, including (i) an exercise price not less than Fair Market Value on the date of grant, (ii) a term not greater than ten years, and (iii) not being exercisable before the expiration of one year from the date of grant to an employee of the Company or any Subsidiary (but may become exercisable pro rata over such time), except for Substitute Awards, under circumstances contemplated by Article 11 or as may be set forth in an Award Agreement with respect to (x) retirement, death or disability of a Participant or (y) special circumstances determined by the Committee, such as the achievement of performance objectives. In addition to the foregoing, but subject to Section 12.2, the base amount of any Stock Appreciation Right shall not be reduced after the date of grant. | |
(h) The Committee may impose such terms and conditions on Stock Appreciation Rights granted in conjunction with any Award (other than an Option) as the Committee shall determine in its sole discretion. |
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9
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11
12
13
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EXECUTIVE OFFICER
RESTRICTED STOCK AWARD AGREEMENT
PATTERSON-UTI ENERGY, INC.
2005 LONG-TERM INCENTIVE PLAN
THIS RESTRICTED STOCK AWARD AGREEMENT (the Agreement ) is made by and between Patterson-UTI Energy, Inc., a Delaware corporation (the Company ), and ___(the Recipient ) effective as of the ___day of ___, 20___(the Grant Date ), pursuant to the Patterson-UTI Energy, Inc. 2005 Long-Term Incentive Plan (the Plan ), which is incorporated by reference herein in its entirety.
WHEREAS , the Company desires to grant to the Recipient the shares of equity securities specified herein (the Shares ), subject to the terms and conditions of this Agreement; and
WHEREAS , the Recipient desires to have the opportunity to hold Shares subject to the terms and conditions of this Agreement;
NOW, THEREFORE , in consideration of the premises, mutual covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows:
1. | Definitions . For purposes of this Agreement, the following terms shall have the meanings indicated: |
(a) | For purposes of this Agreement, a Change in Control of the Company shall mean the occurrence of any of the following after the Grant Date: |
i. | The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended) (a Covered Person ) of beneficial ownership (within the meaning of rule 13d-3 promulgated under the Exchange Act) of 35% or more of either (A) the then outstanding shares of the common stock of the Company (the Outstanding Company Common Stock ), or (B) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the Outstanding Company Voting Securities ); provided , however , that for purposes of this subsection (i) of this Section 1(a), the following acquisitions shall not constitute a Change in Control of the Company: (A) any acquisition directly from the Company, (B) any acquisition by the Company, (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any entity controlled by the Company, or (D) any acquisition by any corporation pursuant to a transaction which complies with clauses (A), (B) and (C) of subsection (iii) of this Section 1(a); or |
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ii. | Individuals who, as of the Grant Date, constitute the Board of Directors (the Incumbent Board ) cease for any reason to constitute at least a majority of the Board of Directors; provided , however , that any individual becoming a director subsequent to the Grant Date whose election, or nomination for election by the Companys stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Covered Person other than the Board; or | |||
iii. | Consummation of (xx) a reorganization, merger or consolidation or sale of the Company or any subsidiary of the Company, or (yy) a disposition of all or substantially all of the assets of the Company (a Business Combination ), in each case, unless, following such Business Combination, (A) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, direct or indirectly, more than 65% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Companys assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership immediately prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (B) no Covered Person (excluding any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 35% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation, except to the extent that such ownership existed prior to the Business Combination, and (C) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or, if earlier, of the action of the Board of Directors, providing for such Business Combination. |
(b) | Forfeiture Restrictions shall mean any prohibitions and restrictions set forth herein with respect to the sale or other disposition of Shares issued to the |
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Recipient hereunder and the obligation to forfeit and surrender such shares to the Company. | |||
(c) | Restricted Shares shall mean the Shares that are subject to the Forfeiture Restrictions under this Agreement. | ||
Capitalized terms not otherwise defined in this Agreement shall have the meanings given to such terms in the Plan. | ||||
2. | Grant of Restricted Shares . Effective as of the Grant Date, the Company shall cause to be issued in the Recipients name the following Shares as Restricted Shares: ___shares of the Companys common stock, $.01 par value per share. The Company shall cause certificates evidencing the Restricted Shares to be issued in the Recipients name, and, subject to the Forfeiture Restrictions and other terms and conditions of this Agreement, the Recipient shall have all the rights of a stockholder with respect to such Restricted Shares, including the right to vote such Shares. Regular, ordinary dividends paid with respect to the Restricted Shares in cash shall be paid to the Recipient currently. All other dividends and distributions, whether paid in cash, equity securities in the Company, rights to acquire equity securities in the Company or any other property shall be added to and become a part of the Restricted Shares, unless the Committee, in its sole discretion, determines that such other dividends or distributions shall be paid to the Recipient currently. Upon issuance, the certificates shall be delivered to the Secretary of the Company or to such other depository as may be designated by the Committee under the Plan as a depository for safekeeping until the forfeiture of such Restricted Shares occurs or the Forfeiture Restrictions lapse and the withholding provisions of Section 6 have been satisfied. Effective as of the Grant Date, the Recipient shall deliver to the Company all stock powers, endorsed in blank, relating to the Restricted Shares. In accepting this award of Shares the Recipient accepts and agrees to be bound by all the terms and conditions of the Plan. | |||
3. | Transfer Restrictions . The Shares granted hereby may not be sold, assigned, pledged, exchanged, hypothecated or otherwise transferred, encumbered or disposed of, to the extent then subject to the Forfeiture Restrictions. Any such attempted sale, assignment, pledge, exchange, hypothecation, transfer, encumbrance or disposition in violation of this Agreement shall be void and the Company shall not be bound thereby. Notwithstanding the foregoing, the Recipient may assign or transfer the Shares granted hereby pursuant to a qualified domestic relations order (as defined in Section 401(a)(13) of the Internal Revenue Code of 1986, as amended, or Section 206(d)(3) of the Employee Retirement Income Security Act of 1974, as amended), or with the consent of the Committee (i) for charitable donations; (ii) to the Recipients spouse, children or grandchildren (including any adopted and stepchildren and grandchildren), or (iii) a trust for the benefit of the Recipient or the persons referred to in clause (ii) (each transferee thereof, a Permitted Assignee ); provided that such Permitted Assignee shall be bound by and subject to all of the terms and conditions of the Plan and this Award Agreement and shall execute an agreement satisfactory to the Company evidencing such obligations and all requested stock powers, endorsed in blank, relating to the Restricted Shares; and provided further that the Recipient shall remain bound by the terms and conditions of the Plan. Further, the Shares granted hereby that are no longer subject to Forfeiture Restrictions may not be sold or otherwise disposed of in any manner which would constitute a violation of any applicable federal or state securities laws, and the |
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Recipient agrees (i) that the Company may refuse to cause the transfer of the Shares to be registered on the applicable stock transfer records if such proposed transfer would, in the opinion of counsel satisfactory to the Company, constitute a violation of any applicable securities law, and (ii) that the Company may give related instructions to the transfer agent, if any, to stop registration of the transfer of the Shares. | ||||
4. | Vesting . The Shares that are granted hereby shall be subject to the Forfeiture Restrictions. All of the Forfeiture Restrictions shall lapse and the Restricted Shares shall vest as follows (it being understood that the number of shares of Restricted Shares as to which all restrictions have lapsed and which have vested in the Recipient at any time shall be the greatest of the number of vested Shares specified in subparagraph (a), (b), (c) or (d) below): |
(a) | The Recipient shall become vested as to the Restricted Shares pursuant to the following vesting schedule: |
(i) | on the third anniversary of the Grant Date, 50% of the Restricted Shares subject to this Agreement shall vest; and | |||
(ii) | on the fourth anniversary of the Grant Date, the remaining 50% of the Restricted Shares subject to this Agreement shall vest. |
(b) | If the Recipients employment with the Company and all Subsidiaries is terminated for any reason other than death or disability before all the Shares have vested, the Shares that have not vested shall be forfeited and the Recipient shall cease to have any rights of a stockholder with respect to such forfeited Shares. | |||
(c) | In the event of the termination of the Recipients employment with the Company and all Subsidiaries due to death or disability before all of the Share have vested, the Recipient shall become vested in the number of Restricted Shares equal to the sum of the following: |
(i) | a number equal to the product of (A) 50% of the Restricted Shares that are granted hereby, multiplied by (B) a fraction, the numerator of which is the number of days in the period commencing on and including the Grant Date and ending on and including the date of the Recipients termination of employment due to death or disability, and the denominator of which is 1095, plus | |||
(ii) | a number equal to the product of (A) 50% of the Restricted Shares that are granted hereby, multiplied by (B) a fraction, the numerator of which is the number of days in the period commencing on and including the Grant Date and ending on and including the date of the Recipients termination of employment due to death or disability, and the denominator of which is 1461. |
(d) | Upon the occurrence of a Change in Control of the Company, the Shares that have not vested as of the date of such Change in Control of the Company shall be |
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100% vested; provided, however , that this subparagraph (d) shall not apply if the Recipient is the Covered Person or forms part of the Covered Person as specified in Section 1(a)(i) that acquires 35% or more of either the Outstanding Company Common Stock or Outstanding Company Voting Securities and such acquisition constitutes a Change in Control of the Company. |
Shares that do not become vested pursuant to subparagraphs (a), (b), (c) or (d) above shall be forfeited and the Recipient shall cease to have any rights of a stockholder with respect to such forfeited Shares | ||||
Upon the lapse of the Forfeiture Restrictions with respect to Shares granted hereby and the satisfaction of the withholding provisions of Section 6, the Company shall cause to be delivered to the Recipient a stock certificate representing such Shares, and such Shares shall be transferable by the Recipient (except to the extent that any proposed transfer would, in the opinion of counsel satisfactory to the Company, constitute a violation of applicable securities law). | ||||
5. | Capital Adjustments and Reorganizations . The existence of the Restricted Shares shall not affect in any way the right or power of the Company or any company the stock of which is awarded pursuant to this Agreement to make or authorize any adjustment, recapitalization, reorganization or other change in its capital structure or its business, engage in any merger or consolidation, issue any debt or equity securities, dissolve or liquidate, or sell, lease, exchange or otherwise dispose of all or any part of its assets or business, or engage in any other corporate act or proceeding. | |||
6. | Tax Withholding . To the extent that the receipt of the Restricted Shares or the lapse of any Forfeiture Restrictions results in income to the Recipient for federal, state or local income, employment, excise or other tax purposes with respect to which the Company or any of its Subsidiaries has a withholding obligation (including, but not limited to, any such withholding obligation resulting from an election described in Section 7 of this Agreement), the Recipient shall deliver to the Company or such Subsidiary at the time of such receipt or lapse, as the case may be, such amount of money as the Company or such Subsidiary may require to meet its obligation under applicable tax laws or regulations. If the Recipient fails to do so, the Company or it Subsidiary is authorized to withhold from wages or other amounts otherwise payable to such Recipient the minimum statutory withholding taxes as may be required by law or to take such other action as may be necessary to satisfy such withholding obligations. The Committee may, in its sole discretion, permit the Recipient to satisfy such obligation for the payment of such taxes by tendering previously acquired Shares (either actually or by attestation, valued at their then Fair Market Value) that have been owned for a period of at least six months (or such other period to avoid accounting charges against the Companys earnings), or by directing the Company to retain Shares (up to the Recipients minimum required tax withholding rate or such other rate that will not trigger a negative accounting impact) otherwise deliverable under this Agreement. The Company shall not be obligated to deliver or release any Shares granted hereby until all applicable federal, state and local income, employment, excise or other tax withholding requirements have been satisfied. |
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7. | Section 83(b) Election . The Recipient shall not exercise the election permitted under Section 83(b) of the Internal Revenue Code of 1986, as amended, with respect to the Restricted Shares without the prior written approval of the Chairman of the Committee. If the Chairman of the Committee permits the election, the Recipient shall timely comply with the Recipients obligations under, and the Company and its Subsidiaries shall have all the rights under, Section 6 of this Agreement with respect to any tax withholding obligation relating to any such election. | |||
8. | No Fractional Shares . All provisions of this Agreement concern whole Shares. Notwithstanding anything contained in this Agreement to the contrary, if the application of any provision of this Agreement would yield a fractional share, such fractional share shall be rounded down to the next whole Share. | |||
9. | Not an Employment Agreement . This Agreement is not an employment agreement, and no provision of this Agreement shall be construed or interpreted to create an employment relationship between the Recipient, the Company or any of its Subsidiaries or guarantee the right to remain an employee of the Company or its Subsidiaries for any specified term. | |||
10. | Legend . The Recipient consents to the placing on the certificate for the Shares of an appropriate legend restricting resale or other transfer of the Shares except in accordance with all applicable securities laws and rules thereunder, as well as any legend under Section 13.5 of the Plan as determined by the Committee. | |||
11. | Notices . Any notice, instruction, authorization, request or demand required hereunder shall be in writing, and shall be delivered either by personal delivery, by telegram, telex, telecopy or similar facsimile means, by certified or registered mail, return receipt requested, by facsimile transmission or by courier or delivery service, to the Company at 4510 Lamesa Hwy., Snyder, Texas 79549, Attention: Chief Financial Officer, facsimile number (325) 574-6307, and to the Recipient at the Recipients address and facsimile number (if applicable) indicated beneath the Recipients signature on the execution page of this Agreement, or at such other address and facsimile number as a party shall have previously designated by written notice given to the other party in the manner hereinabove set forth. Notices shall be deemed given when received, if sent by facsimile means (confirmation of such receipt by confirmed facsimile transmission being deemed receipt of communications sent by facsimile means); and when delivered (or upon the date of attempted delivery where delivery is refused), if hand-delivered, sent by express courier or delivery service, or sent by certified or registered mail, return receipt requested. | |||
12. | Amendment and Waiver . Except as otherwise provided in Section 12.1 of the Plan, this Agreement may be amended, modified or superseded only by written instrument executed by the Company and the Recipient. Only a written instrument executed and delivered by the party waiving compliance hereof shall make any waiver of the terms or conditions effective. Any waiver granted by the Company shall be effective only if executed and delivered by a duly authorized executive officer of the Company. The failure of any party at any time or times to require performance of any provisions hereof |
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shall in no manner affect the right to enforce the same. No waiver by any party of any term or condition, or of any breach of any term or condition, contained in this Agreement, in one or more instances, shall be construed as a continuing waiver of any such condition or breach, a waiver of any other term or condition, or a waiver of any breach of any other term or condition. | ||||
13. | Governing Law and Severability . This Agreement shall be governed by the laws of the State of Delaware without regard to its conflicts of law provisions. The invalidity of any provision of this Agreement shall not affect any other provision of this Agreement, which shall remain in full force and effect. | |||
14. | Successors and Assigns . Subject to the limitations which this Agreement imposes upon the transferability of the Shares granted hereby, this Agreement shall bind, be enforceable by and inure to the benefit of the Company and its successors and assigns, and to the Recipient, the Recipients Permitted Assignees, executors, administrators, agents, legal and personal representatives. | |||
15. | Counterparts . This Agreement may be executed in two or more counterparts, each of which shall be an original for all purposes but all of which taken together shall constitute but one and the same instrument | |||
16. | Grant Subject to Terms of Plan and this Agreement. The Recipient acknowledges and agrees that the grant of the Restricted Shares hereunder is made pursuant to and governed by the terms of the Plan and this Agreement, ratifies and consents to any action taken by the Company, the Board of Directors or the Committee concerning the Plan and agrees that the grant of the Restricted Shares pursuant to this Agreement is subject in all respects to the more detailed provisions of the Plan. |
[SIGNATURES BEGIN ON FOLLOWING PAGE]
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IN WITNESS WHEREOF , the Company has caused this Agreement to be duly executed by an officer thereunto duly authorized, and the Recipient has executed this Agreement, all effective as of the date first above written.
PATTERSON-UTI ENERGY, INC.:
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By: | ||||
Name: | ||||
Title: | ||||
RECIPIENT: | ||||
Name: | ||||
Address: | ||||
Facsimile No.: |
IRREVOCABLE STOCK POWER
KNOW ALL MEN BY THESE PRESENTS, THAT the undersigned, FOR VALUE RECEIVED , has bargained, sold, assigned and transferred and by these presents does bargain, sell, assign and transfer unto Patterson-UTI Energy, Inc., a Delaware corporation (the Company ), the Shares transferred pursuant to the Restricted Stock Award Agreement dated effective as of ___, 20___, between the Company and the undersigned; AND subject to and in accordance with such Restricted Stock Award Agreement the undersigned does hereby constitute and appoint the Secretary of the Company the undersigneds true and lawful attorney, IRREVOCABLY , to sell assign, transfer, hypothecate, pledge and make over all or any part of such Shares and for that purpose to make and execute all necessary acts of assignment and transfer thereof, and to substitute one or more persons with like full power, hereby ratifying and confirming all that said attorney or his or her substitutes shall lawfully do by virtue hereof.
IN WITNESS WHEREOF , the undersigned has executed this Irrevocable Stock Power effective the ___day of ___, 20___.
Name:
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EXECUTIVE OFFICER
STOCK OPTION AGREEMENT
PATTERSON-UTI ENERGY, INC.
2005 LONG-TERM INCENTIVE PLAN
THIS STOCK OPTION AGREEMENT (this Agreement ) is effective as of ___, 20___(the Grant Date ), between Patterson-UTI Energy, Inc., a Delaware corporation ( the Company ), and ___(the Employee ).
W I T N E S S E T H :
WHEREAS , the Company has established the Patterson-UTI Energy, Inc. 2005 Long-Term Incentive Plan (the Plan ); and
WHEREAS , the Employee is currently an employee of the Company or one of its Subsidiaries, and the Company desires to encourage the Employees continued service and, as an inducement thereto, has determined to grant to the Employee pursuant to the Plan the option provided for herein.
NOW, THEREFORE , in consideration of the premises and the covenants and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Employee hereby agree as follows:
1. | Grant . Effective as of the Grant Date, the Company hereby grants to the Employee pursuant to the terms and conditions of the Plan an option (the Option ) to purchase ___ Shares of Common Stock at a price of $ per share (the Option Price ). The Option shall be for a term commencing on the Grant Date and ending on ___ , 20___(the Expiration Date ) (unless such Option terminates earlier as provided in this Agreement or as set forth under the terms of the Plan). The Option is subject to the terms and provisions of the Plan, which are hereby incorporated herein by reference and the terms and provisions of this Agreement. Capitalized terms not otherwise defined in this Agreement shall have the meanings given to such terms in the Plan. |
The Option shall vest and be exercisable as follows:
(a) | on the first anniversary of the Grant Date, the Option shall be vested and become exercisable with respect to one-third (1/3) of the Shares subject to the Option; | |||
(b) | on the ___day of each month of the twenty-three (23) months thereafter, one thirty-sixth (1/36) of the Shares subject to the Option shall be vested and become exercisable and on the ___day of the thirty-sixth month following the Grant Date the remaining Shares subject to the Option shall be vested and become exercisable; and |
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(c) | to the extent not exercised, installments shall be cumulative and may be exercised in whole or in part. |
2. | Changes in the Companys Capital Structure. |
(a) | The existence of the Option shall not affect in any way the right or power of the Company (or any company the stock of which is awarded pursuant to this Agreement) or its stockholders to make or authorize any adjustment, recapitalization, reorganization or other changes in its capital structure or its business, engage in any merger or consolidation, issue any debt or equity securities, dissolve or liquidate, or sell, lease, exchange or otherwise dispose of all or any part of its assets or business, or engage in any other corporate act or proceeding, whether of a similar character or otherwise. | |||
(b) | In the event of any merger, reorganization, consolidation, recapitalization, dividend or distribution (whether in cash, shares or other property, other than a regular cash dividend), stock split, reverse stock split, spin-off or similar transaction or other change in corporate structure affecting the Shares or the value thereof, the Committee shall make appropriate adjustment in the number of Shares subject to the Option, the Option Price and the securities issuable and other property payable upon exercise of the Option (including, if the Committee deems appropriate, the substitution of similar options to purchase the shares of, or other awards denominated in the shares of, another company); provided, however , that no such adjustment shall increase the aggregate value of the securities awarded under this Agreement and that the number of Shares subject to this Option shall always be a whole number. |
3. | Change in Control of the Company. Notwithstanding the vesting schedule set forth in Section 1 of this Agreement, all unvested Options will immediately vest and become immediately exercisable upon a Change in Control of the Company. For purposes of this Agreement, a Change in Control of the Company shall mean the occurrence of any of the following after the Grant Date: |
(a) | The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended) (a Covered Person ) of beneficial ownership (within the meaning of rule 13d-3 promulgated under the Exchange Act) of 35% or more of either (i) the then outstanding shares of the common stock of the Company (the Outstanding Company Common Stock ), or (ii) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the Outstanding Company Voting Securities ); provided , however , that for purposes of this subsection (a) of this Section 3, the following acquisitions shall not constitute a Change in Control of the Company: (i) any acquisition directly from the Company, (ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any entity controlled by the Company, or (iv) any |
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acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii) and (iii) of subsection (c) of this Section 3; or | ||||
(b) | Individuals who, as of the Grant Date, constitute the Board of Directors (the Incumbent Board ) cease for any reason to constitute at least a majority of the Board of Directors; provided , however , that any individual becoming a director subsequent to the Grant Date whose election, or nomination for election by the Companys stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Covered Person other than the Board; or | |||
(c) | Consummation of (xx) a reorganization, merger or consolidation or sale of the Company or any subsidiary of the Company, or (yy) a disposition of all or substantially all of the assets of the Company (a Business Combination ), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, direct or indirectly, more than 65% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Companys assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership immediately prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (ii) no Covered Person (excluding any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 35% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation, except to the extent that such ownership existed prior to the Business Combination, and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or, if earlier, of the action of the Board of Directors, providing for such Business Combination. |
4. | Exercise of Options . The Option may be exercised from time to time as to the total number of shares that may then be issuable upon the exercise thereof or any portion thereof by the Employee, a Permitted Assignee (as defined in Section 5) with the consent |
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of the Committee, or, in the event of the death or disability of the Employee, the Employees executors, administrators, guardian or legal representative by giving written notice of such exercise to the Company or its designated agent in substantially the form attached hereto as Exhibit A . |
5. | Assignment . The Option may not be transferred or assigned in any manner by the Employee except by will or the laws of descent and distribution or pursuant to a qualified domestic relations order (as defined in Section 401(a)(13) of the Internal Revenue Code of 1986, as amended, or Section 206(d)(3) of the Employee Retirement Income Security Act of 1974, as amended), and shall be exercisable during the Employees lifetime only by him or her (or, if under a qualified domestic relations order, his or her payee. Notwithstanding the foregoing, a Participant may assign or transfer the Option with the consent of the Committee (i) for charitable donations; (ii) to the Employees spouse, children or grandchildren (including any adopted and stepchildren and grandchildren), or (iii) to a trust for the benefit of the Employee or the persons referred to in clause (ii) (each transferee thereof, a Permitted Assignee ); provided that such Permitted Assignee shall be bound by and subject to all of the terms and conditions of the Plan and this Agreement and shall execute an agreement satisfactory to the Company evidencing such obligations; and provided further that such Employee shall remain bound by the terms and conditions of the Plan. |
6. | Requirements of Law . The Company shall not be required to sell or issue any shares on the exercise of the Option if the issuance of such shares shall constitute a violation by the Employee or the Company of any provisions of any law or regulation of any governmental authority. The Option shall be subject to the requirements that, if at any time the Board of Directors of the Company or the Committee shall determine that the listing, registration or qualification of the shares subject thereto upon any securities exchange or under any state or federal law of the United States or of any other country or governmental subdivision thereof, or the consent or approval of any governmental regulatory body, or investment or other representations, are necessary or desirable in connection with the issue or purchase of shares subject thereto, the Option may not be exercised in whole or in part unless such listing, registration, qualification, consent, approval or representation shall have been effected or obtained free of any conditions not acceptable to the Board of Directors. If required at any time by the Board of Directors or the Committee, the Option may not be exercised until the Employee has delivered an investment letter to the Company. In addition, specifically in connection with the Securities Act of 1933 (as now in effect or hereafter amended) (the Act ), upon exercise of the Option, the Company shall not be required to issue the underlying shares unless the Committee has received evidence satisfactory to it to the effect that the Employee will not transfer such shares except pursuant to a registration statement in effect under the Act or unless an opinion of counsel satisfactory to the Committee has been received by the Company to the effect that such registration is not required. Any determination in this connection by the Committee shall be final, binding and conclusive. In the event the shares issuable on exercise of the Option are not registered under the Act, the Company may imprint on the certificate for such shares the following legend or any other legend that counsel for the Company considers necessary or advisable to comply with the Act: |
The shares of stock represented by this certificate have not been registered under the Securities Act of 1933 or under the securities laws of any state and may not be sold or transferred |
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except upon such registration or upon receipt by the Corporation of an opinion of counsel satisfactory to the Corporation, in form and substance satisfactory to the Corporation, that registration is not required for such sale or transfer. |
The Company may, but shall in no event be obligated to, register any securities covered hereby pursuant to the Act. The Company shall not be obligated to take any other affirmative action to cause the exercise of the Option or the issuance of Shares pursuant thereto to comply with any law or regulation of any governmental authority. | ||||
7. | Termination . The Option, to the extent it shall not previously have been exercised, shall terminate on the earlier of the following unless the Committee extends the term of this Option to a period not extending beyond the Expiration Date: |
(a) | Three years after the date of the severance of the employment relationship between the Company (and all of its Subsidiaries) and the Employee, whether with or without cause and for any reason. Effective as of the Employees severance of employment, the Employee shall cease vesting in his Option but during the three-year period following his severance of employment, the Employee shall be entitled to exercise his vested Option in respect of the number of shares that the Employee would have been entitled to purchase had the Employee exercised the Option on the date of such severance of employment. If the Employee should die within such three year period, the Employees executor, administrator, or the person to whom the Option shall be transferred by the Employees will or the laws of descent and distribution shall have until the end of the original three-year time period to exercise the Employees vested Option in respect of the number of shares that the Employee would have been entitled to purchase had the Employee exercised the Option on the date of the Employees severance of employment. | |||
(b) | On the Expiration Date. |
8. | Amendment and Waiver . Except as otherwise provided in Section 12.1 of the Plan, this Agreement may be amended, modified or superseded only by written instrument executed by the Company and the Employee. Only a written instrument executed and delivered by the party waiving compliance hereof shall make any waiver of the terms or conditions effective. Any waiver granted by the Company shall be effective only if executed and delivered by a duly authorized executive officer of the Company. The failure of any party at any time or times to require performance of any provisions hereof shall in no manner affect the right to enforce the same. No waiver by any party of any term or condition, or of any breach of any term or condition, contained in this Agreement, in one or more instances, shall be construed as a continuing waiver of any such condition or breach, a waiver of any other term or condition, or a waiver of any breach of any other term or condition. |
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9. | No Rights as a Stockholder . The Employee shall not have any rights as a stockholder with respect to any Shares issuable upon the exercise of the Option until the date of issuance of the stock certificate or certificates representing such Shares following the Employees exercise of the Option pursuant to its terms and conditions and payment for such Shares. Except as otherwise provided in the Plan, no adjustment shall be made for dividends or other distributions made with respect to the Common Stock the record date for the payment of which is prior to the date of issuance of the stock certificate or certificates representing such shares following the Employees exercise of the Option. |
10. | Tax Withholding . To the extent that the grant, exercise or vesting of the Option results in income to the Employee for federal, state or local income, employment, excise or other tax purposes with respect to which the Company or any of its Subsidiaries has a withholding obligation, the Employee shall deliver to the Company or such Subsidiary at the time of such receipt or lapse, as the case may be, such amount of money as the Company or such Subsidiary may require to meet its obligation under applicable tax laws or regulations. If the Employee fails to do so, the Company or its Subsidiary is authorized to withhold from wages or other amounts otherwise payable to such Employee the minimum statutory withholding taxes as may be required by law or to take such other action as may be necessary to satisfy such withholding obligations. The Committee may, in its sole discretion, permit the Employee to satisfy such obligation for the payment of such taxes by tendering previously acquired Shares (either actually or by attestation, valued at their then Fair Market Value) that have been owned for a period of at least six months (or such other period to avoid accounting charges against the Companys earnings), or by directing the Company to retain Shares (up to the Employees minimum required tax withholding rate or such other rate that will not trigger a negative accounting impact) otherwise deliverable under this Agreement. The Company shall not be obligated to issue any Shares upon the exercise of any Options granted hereunder until all applicable federal, state and local income, employment, excise or other tax withholding requirements have been satisfied. |
11. | No Fractional Shares . All provisions of this Agreement concern whole Shares. Notwithstanding anything contained in this Agreement to the contrary, if the application of any provision of this Agreement would yield a fractional share, such fractional share shall be rounded down to the next whole Share. |
12. | Governing Law and Severability . This Agreement shall be governed by the laws of the State of Delaware without regard to its conflicts of law provisions. The invalidity of any provision of this Agreement shall not affect any other provision of this Agreement, which shall remain in full force and effect. |
13. | Notices . Any notice, instruction, authorization, request or demand required hereunder shall be in writing, and shall be delivered either by personal delivery, by telegram, telex, telecopy or similar facsimile means, by certified or registered mail, return receipt requested, by facsimile transmission or by courier or delivery service, to the Company at 4510 Lamesa Hwy., Snyder, Texas 79549, Attention: Chief Financial Officer, facsimile number (325) 574-6307, and to the Employee at the Employees address and facsimile |
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number (if applicable) indicated beneath the Employees signature on the execution page of this Agreement, or at such other address and facsimile number as a party shall have previously designated by written notice given to the other party in the manner hereinabove set forth. Notices shall be deemed given when received, if sent by facsimile means (confirmation of such receipt by confirmed facsimile transmission being deemed receipt of communications sent by facsimile means); and when delivered (or upon the date of attempted delivery where delivery is refused), if hand-delivered, sent by express courier or delivery service, or sent by certified or registered mail, return receipt requested. | ||||
14. | No Employment Obligation . This Agreement is not an employment agreement, and no provision of this Agreement shall be construed or interpreted to create an employment relationship between the Employee, the Company or any of its Subsidiaries or guarantee the right to remain an employee of the Company or any of its Subsidiaries for any specified term or to affect any right that the Company or any Subsidiary may have to terminate the employment of (or to demote or to exclude from future Awards under the Plan) the Employee at any time for any reason. | |||
15. | Successors and Assigns . Except as otherwise provided to the contrary in this Agreement or in the Plan, this Agreement shall bind, be enforceable by and inure to the benefit of the Company, its Subsidiaries, and their successors and assigns, and to the Employee, the Employees Permitted Assignees, executors, administrators, agents, legal and personal representatives. | |||
16. | Grant Subject to Terms of Plan and this Agreement. The Employee acknowledges and agrees that the grant of the Option hereunder is made pursuant to and governed by the terms of the Plan and this Agreement, ratifies and consents to any action taken by the Company, the Board of Directors or the Committee concerning the Plan and agrees that the grant of the Option pursuant to this Agreement is subject in all respects to the more detailed provisions of the Plan. | |||
17. | Counterparts . This Agreement may be executed in two or more counterparts, each of which shall be an original for all purposes but all of which taken together shall constitute but one and the same instrument. | |||
18. | Non-Incentive Stock Option . The Option is not intended to qualify as an incentive stock option as defined in Section 422 of the Internal Revenue Code of 1986, as amended. |
[SIGNATURES BEGIN ON FOLLOWING PAGE]
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IN WITNESS WHEREOF , this Agreement has been duly executed and delivered as of the day and year first above mentioned.
PATTERSON-UTI ENERGY, INC.:
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By: | ||||
Name: | ||||
Title: |
EMPLOYEE:
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EXHIBIT A
PATTERSON-UTI ENERGY, INC. 2005 LONG-TERM INCENTIVE PLAN
Exercise of Stock Option
Patterson-UTI Energy, Inc.
4510 Lamesa Highway
P.O. Box 1416
Snyder, TX 79550
Attention: Chief Financial Officer
Dear Sir or Madam:
The undersigned Optionee, ___, hereby exercises the Option granted to him pursuant to the Patterson-UTI Energy, Inc. 2005 Long-Term Incentive Plan dated as of ___, 20___ between Patterson-UTI Energy, Inc. (the Company) and the Optionee with respect to ___ Shares of common stock, $0.01 par value per share, of the Company covered by said Option, and tenders, and tenders herewith the following form of payment [check all that apply]:
o | Check for $ , payable to Patterson-UTI Energy, Inc. |
o | Certificate(s) for shares of Common Stock of the Company that I have owned for at least six months or have purchased in the open market. (These shares will be valued as of the date when the Company receives this notice.) |
o | Attestation Form covering shares of Common Stock of the Company. (These shares will be valued as of the date when the Company receives this notice.) |
The exact legal name and registered address on such certificate should be:
The Optionees social security number is: .
ACKNOWLEDGMENTS:
1. | I understand that all sales of purchased Shares are subject to compliance with the Companys policy on securities trades, and I acknowledge that the Company has encouraged me to consult my own adviser to determine the form of ownership that is appropriate for me. |
2. | I hereby acknowledge that I received and read a copy of the prospectus describing Patterson-UTIs 2005 Long-Term Incentive Plan and the tax consequences of an exercise. |
3. | I understand that I must recognize ordinary income equal to the excess of the fair market value of the purchased Shares on the date of exercise and the exercise price. I further understand that I am required to pay withholding taxes at the time of exercising this Option. |
OPTIONEES SIGNATURE
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DATE: | |
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NON-EMPLOYEE DIRECTOR
RESTRICTED STOCK AWARD AGREEMENT
PATTERSON-UTI ENERGY, INC.
2005 LONG-TERM INCENTIVE PLAN
THIS RESTRICTED STOCK AWARD AGREEMENT (the Agreement ) is made by and between Patterson-UTI Energy, Inc., a Delaware corporation (the Company ), and ___(the Recipient ) effective as of the ___day of ___, 20___(the Grant Date ), pursuant to the Patterson-UTI Energy, Inc. 2005 Long-Term Incentive Plan (the Plan ), which is incorporated by reference herein in its entirety.
WHEREAS , the Company desires to grant to the Recipient the shares of equity securities specified herein (the Shares ), subject to the terms and conditions of this Agreement; and
WHEREAS , the Recipient desires to have the opportunity to hold Shares subject to the terms and conditions of this Agreement;
NOW, THEREFORE , in consideration of the premises, mutual covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows:
1. | Definitions . For purposes of this Agreement, the following terms shall have the meanings indicated: |
(a) | For purposes of this Agreement, a Change in Control of the Company shall mean the occurrence of any of the following after the Grant Date: |
i. | The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended) (a Covered Person ) of beneficial ownership (within the meaning of rule 13d-3 promulgated under the Exchange Act) of 35% or more of either (A) the then outstanding shares of the common stock of the Company (the Outstanding Company Common Stock ), or (B) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the Outstanding Company Voting Securities ); provided , however , that for purposes of this subsection (i) of this Section 1(a), the following acquisitions shall not constitute a Change in Control of the Company: (A) any acquisition directly from the Company, (B) any acquisition by the Company, (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any entity controlled by the Company, or (D) any acquisition by any corporation pursuant to a transaction which complies with clauses (A), (B) and (C) of subsection (iii) of this Section 1(a); or |
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ii. | Individuals who, as of the Grant Date, constitute the Board of Directors (the Incumbent Board ) cease for any reason to constitute at least a majority of the Board of Directors; provided , however , that any individual becoming a director subsequent to the Grant Date whose election, or nomination for election by the Companys stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Covered Person other than the Board; or |
iii. | Consummation of (xx) a reorganization, merger or consolidation or sale of the Company or any subsidiary of the Company, or (yy) a disposition of all or substantially all of the assets of the Company (a Business Combination ), in each case, unless, following such Business Combination, (A) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, direct or indirectly, more than 65% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Companys assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership immediately prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (B) no Covered Person (excluding any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 35% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation, except to the extent that such ownership existed prior to the Business Combination, and (C) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or, if earlier, of the action of the Board of Directors, providing for such Business Combination. |
(b) | Forfeiture Restrictions shall mean any prohibitions and restrictions set forth herein with respect to the sale or other disposition of Shares issued to the Recipient hereunder and the obligation to forfeit and surrender such shares to the Company. |
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(c) | Restricted Shares shall mean the Shares that are subject to the Forfeiture Restrictions under this Agreement. |
Capitalized terms not otherwise defined in this Agreement shall have the meanings given to such terms in the Plan.
2. | Grant of Restricted Shares . Effective as of the Grant Date, the Company shall cause to be issued in the Recipients name the following Shares as Restricted Shares: ___shares of the Companys common stock, $.01 par value per share. The Company shall cause certificates evidencing the Restricted Shares to be issued in the Recipients name, and, subject to the Forfeiture Restrictions and other terms and conditions of this Agreement, the Recipient shall have all the rights of a stockholder with respect to such Restricted Shares, including the right to vote such Shares. Regular, ordinary dividends paid with respect to the Restricted Shares in cash shall be paid to the Recipient currently. All other dividends and distributions, whether paid in cash, equity securities in the Company, rights to acquire equity securities in the Company or any other property shall be added to and become a part of the Restricted Shares, unless the Committee, in its sole discretion, determines that such other dividends or distributions shall be paid to the Recipient currently. Upon issuance, the certificates shall be delivered to the Secretary of the Company or to such other depository as may be designated by the Committee under the Plan as a depository for safekeeping until the forfeiture of such Restricted Shares occurs or the Forfeiture Restrictions lapse. Effective as of the Grant Date, the Recipient shall deliver to the Company all stock powers, endorsed in blank, relating to the Restricted Shares. In accepting this award of Shares the Recipient accepts and agrees to be bound by all the terms and conditions of the Plan. | |||
3. | Transfer Restrictions . The Shares granted hereby may not be sold, assigned, pledged, exchanged, hypothecated or otherwise transferred, encumbered or disposed of, to the extent then subject to the Forfeiture Restrictions. Any such attempted sale, assignment, pledge, exchange, hypothecation, transfer, encumbrance or disposition in violation of this Agreement shall be void and the Company shall not be bound thereby. Notwithstanding the foregoing, the Recipient may assign or transfer the Shares granted hereby pursuant to a qualified domestic relations order (as defined in Section 401(a)(13) of the Internal Revenue Code of 1986, as amended, or Section 206(d)(3) of the Employee Retirement Income Security Act of 1974, as amended), or with the consent of the Committee (i) for charitable donations; (ii) to the Recipients spouse, children or grandchildren (including any adopted and stepchildren and grandchildren), or (iii) a trust for the benefit of the Recipient or the persons referred to in clause (ii) (each transferee thereof, a Permitted Assignee ); provided that such Permitted Assignee shall be bound by and subject to all of the terms and conditions of the Plan and this Award Agreement and shall execute an agreement satisfactory to the Company evidencing such obligations and all requested stock powers, endorsed in blank, relating to the Restricted Shares; and provided further that the Recipient shall remain bound by the terms and conditions of the Plan. Further, the Shares granted hereby that are no longer subject to Forfeiture Restrictions may not be sold or otherwise disposed of in any manner which would constitute a violation of any applicable federal or state securities laws, and the Recipient agrees (i) that the Company may refuse to cause the transfer of the Shares to be |
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registered on the applicable stock transfer records if such proposed transfer would, in the opinion of counsel satisfactory to the Company, constitute a violation of any applicable securities law, and (ii) that the Company may give related instructions to the transfer agent, if any, to stop registration of the transfer of the Shares.
4. | Vesting . The Shares that are granted hereby shall be subject to the Forfeiture Restrictions. All of the Forfeiture Restrictions shall lapse and the Restricted Shares shall vest as follows (it being understood that the number of shares of Restricted Shares as to which all restrictions have lapsed and which have vested in the Recipient at any time shall be the greatest of the number of vested Shares specified in subparagraph (a), (b), (c) or (d) below): |
(a) | The Recipient shall become 100% vested as to the Restricted Shares on the first anniversary of the Grant Date. | |||
(b) | If the Recipients service as a Director is terminated for any reason other than death or disability before all the Shares have vested, the Shares that have not vested shall be forfeited and the Recipient shall cease to have any rights of a stockholder with respect to such forfeited Shares. | |||
(c) | In the event of the death or disability of the Recipient while a Director and before all of the Share have vested, the Recipient shall become vested in the number of Restricted Shares equal to the product of (A) 100% of the Restricted Shares that are granted hereby, multiplied by (B) a fraction, the numerator of which is the number of days in the period commencing on and including the Grant Date and ending on and including the date of the Recipients death or disability, and the denominator of which is 365. | |||
(d) | Upon the occurrence of a Change in Control of the Company, the Shares that have not vested as of the date of such Change in Control of the Company shall be 100% vested; provided, however , that this subparagraph (d) shall not apply if the Recipient is the Covered Person or forms part of the Covered Person as specified in Section 1(a)(i) that acquires 35% or more of either the Outstanding Company Common Stock or Outstanding Company Voting Securities and such acquisition constitutes a Change in Control of the Company. |
Shares that do not become vested pursuant to subparagraphs (a), (b), (c) or (d) above shall be forfeited and the Recipient shall cease to have any rights of a stockholder with respect to such forfeited Shares
Upon the lapse of the Forfeiture Restrictions with respect to Shares granted hereby, the Company shall cause to be delivered to the Recipient a stock certificate representing such Shares, and such Shares shall be transferable by the Recipient (except to the extent that any proposed transfer would, in the opinion of counsel satisfactory to the Company, constitute a violation of applicable securities law).
5. | Capital Adjustments and Reorganizations . The existence of the Restricted Shares shall not affect in any way the right or power of the Company or any company the stock of |
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which is awarded pursuant to this Agreement to make or authorize any adjustment, recapitalization, reorganization or other change in its capital structure or its business, engage in any merger or consolidation, issue any debt or equity securities, dissolve or liquidate, or sell, lease, exchange or otherwise dispose of all or any part of its assets or business, or engage in any other corporate act or proceeding.
6. | Section 83(b) Election . The Recipient shall not exercise the election permitted under Section 83(b) of the Internal Revenue Code of 1986, as amended, with respect to the Restricted Shares without the prior written approval of the Chairman of the Committee. | |||
7. | No Fractional Shares . All provisions of this Agreement concern whole Shares. Notwithstanding anything contained in this Agreement to the contrary, if the application of any provision of this Agreement would yield a fractional share, such fractional share shall be rounded down to the next whole Share. | |||
8. | No Obligation to Retain Services . This Agreement is not a services or employment agreement, and no provision of this Agreement shall be construed or interpreted to create a services or employment relationship between the Recipient, the Company or any of its Subsidiaries or guarantee the Recipient the right to remain a Director for any specified term. | |||
9. | Legend . The Recipient consents to the placing on the certificate for the Shares of an appropriate legend restricting resale or other transfer of the Shares except in accordance with all applicable securities laws and rules thereunder, as well as any legend under Section 13.5 of the Plan as determined by the Committee. | |||
10. | Notices . Any notice, instruction, authorization, request or demand required hereunder shall be in writing, and shall be delivered either by personal delivery, by telegram, telex, telecopy or similar facsimile means, by certified or registered mail, return receipt requested, by facsimile transmission or by courier or delivery service, to the Company at 4510 Lamesa Hwy., Snyder, Texas 79549, Attention: Chief Financial Officer, facsimile number (325) 574-6307, and to the Recipient at the Recipients address and facsimile number (if applicable) indicated beneath the Recipients signature on the execution page of this Agreement, or at such other address and facsimile number as a party shall have previously designated by written notice given to the other party in the manner hereinabove set forth. Notices shall be deemed given when received, if sent by facsimile means (confirmation of such receipt by confirmed facsimile transmission being deemed receipt of communications sent by facsimile means); and when delivered (or upon the date of attempted delivery where delivery is refused), if hand-delivered, sent by express courier or delivery service, or sent by certified or registered mail, return receipt requested. | |||
11. | Amendment and Waiver . Except as otherwise provided in Section 12.1 of the Plan, this Agreement may be amended, modified or superseded only by written instrument executed by the Company and the Recipient. Only a written instrument executed and delivered by the party waiving compliance hereof shall make any waiver of the terms or |
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conditions effective. Any waiver granted by the Company shall be effective only if executed and delivered by a duly authorized executive officer of the Company. The failure of any party at any time or times to require performance of any provisions hereof shall in no manner affect the right to enforce the same. No waiver by any party of any term or condition, or of any breach of any term or condition, contained in this Agreement, in one or more instances, shall be construed as a continuing waiver of any such condition or breach, a waiver of any other term or condition, or a waiver of any breach of any other term or condition.
12. | Governing Law and Severability . This Agreement shall be governed by the laws of the State of Delaware without regard to its conflicts of law provisions. The invalidity of any provision of this Agreement shall not affect any other provision of this Agreement, which shall remain in full force and effect. | |||
13. | Successors and Assigns . Subject to the limitations which this Agreement imposes upon the transferability of the Shares granted hereby, this Agreement shall bind, be enforceable by and inure to the benefit of the Company and its successors and assigns, and to the Recipient, the Recipients Permitted Assignees, executors, administrators, agents, legal and personal representatives. | |||
14. | Counterparts . This Agreement may be executed in two or more counterparts, each of which shall be an original for all purposes but all of which taken together shall constitute but one and the same instrument | |||
15. | Grant Subject to Terms of Plan and this Agreement. The Recipient acknowledges and agrees that the grant of the Restricted Shares hereunder is made pursuant to and governed by the terms of the Plan and this Agreement, ratifies and consents to any action taken by the Company, the Board of Directors or the Committee concerning the Plan and agrees that the grant of the Restricted Shares pursuant to this Agreement is subject in all respects to the more detailed provisions of the Plan. |
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IN WITNESS WHEREOF , the Company has caused this Agreement to be duly executed by an officer thereunto duly authorized, and the Recipient has executed this Agreement, all effective as of the date first above written.
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IRREVOCABLE STOCK POWER
KNOW ALL MEN BY THESE PRESENTS, THAT the undersigned, FOR VALUE RECEIVED , has bargained, sold, assigned and transferred and by these presents does bargain, sell, assign and transfer unto Patterson-UTI Energy, Inc., a Delaware corporation (the Company ), the Shares transferred pursuant to the Restricted Stock Award Agreement dated effective as of ___, 20___, between the Company and the undersigned; AND subject to and in accordance with such Restricted Stock Award Agreement the undersigned does hereby constitute and appoint the Secretary of the Company the undersigneds true and lawful attorney, IRREVOCABLY , to sell assign, transfer, hypothecate, pledge and make over all or any part of such Shares and for that purpose to make and execute all necessary acts of assignment and transfer thereof, and to substitute one or more persons with like full power, hereby ratifying and confirming all that said attorney or his or her substitutes shall lawfully do by virtue hereof.
IN WITNESS WHEREOF , the undersigned has executed this Irrevocable Stock Power effective the ___day of ___, 20___.
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NON-EMPLOYEE DIRECTOR
STOCK OPTION AGREEMENT
PATTERSON-UTI ENERGY, INC.
2005 LONG-TERM INCENTIVE PLAN
THIS STOCK OPTION AGREEMENT (this Agreement ) is effective as of ___, 20___(the Grant Date ), between Patterson-UTI Energy, Inc., a Delaware corporation ( the Company ), and ___(the Director ).
W I T N E S S E T H :
WHEREAS , the Company has established the Patterson-UTI Energy, Inc. 2005 Long-Term Incentive Plan (the Plan ); and
WHEREAS , the Director is currently a director of the Company, and the Company desires to encourage the Directors continued service and, as an inducement thereto, has determined to grant to the Director pursuant to the Plan the option provided for herein.
NOW, THEREFORE , in consideration of the premises and the covenants and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Director hereby agree as follows:
1. | Grant . Effective as of the Grant Date, the Company hereby grants to the Director pursuant to the terms and conditions of the Plan an option (the Option ) to purchase ___ Shares of Common Stock at a price of $ per share (the Option Price ). The Option shall be for a term commencing on the Grant Date and ending on ___ , 20___(the Expiration Date ) (unless such Option terminates earlier as provided in this Agreement or as set forth under the terms of the Plan). The Option is subject to the terms and provisions of the Plan, which are hereby incorporated herein by reference and the terms and provisions of this Agreement. Capitalized terms not otherwise defined in this Agreement shall have the meanings given to such terms in the Plan. |
The Option shall become 100% vested and be 100% exercisable on the first anniversary of the Grant Date. Upon vesting, the Option may be exercised in whole or in part.
2. | Changes in the Companys Capital Structure. |
(a) | The existence of the Option shall not affect in any way the right or power of the Company (or any company the stock of which is awarded pursuant to this Agreement) or its stockholders to make or authorize any adjustment, recapitalization, reorganization or other changes in its capital structure or its business, engage in any merger or consolidation, issue any debt or equity securities, dissolve or liquidate, or sell, lease, exchange or otherwise dispose of all or any part of its assets or business, or engage in any other corporate act or proceeding, whether of a similar character or otherwise. |
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(b) | In the event of any merger, reorganization, consolidation, recapitalization, dividend or distribution (whether in cash, shares or other property, other than a regular cash dividend), stock split, reverse stock split, spin-off or similar transaction or other change in corporate structure affecting the Shares or the value thereof, the Committee shall make appropriate adjustment in the number of Shares subject to the Option, the Option Price and the securities issuable and other property payable upon exercise of the Option (including, if the Committee deems appropriate, the substitution of similar options to purchase the shares of, or other awards denominated in the shares of, another company); provided, however , that no such adjustment shall increase the aggregate value of the securities awarded under this Agreement and that the number of Shares subject to this Option shall always be a whole number. |
3. | Change in Control of the Company. Notwithstanding the vesting schedule set forth in Section 1 of this Agreement, all unvested Options will immediately vest and become immediately exercisable upon a Change in Control of the Company. For purposes of this Agreement, a Change in Control of the Company shall mean the occurrence of any of the following after the Grant Date: |
(a) | The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended) (a Covered Person ) of beneficial ownership (within the meaning of rule 13d-3 promulgated under the Exchange Act) of 35% or more of either (i) the then outstanding shares of the common stock of the Company (the Outstanding Company Common Stock ), or (ii) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the Outstanding Company Voting Securities ); provided , however , that for purposes of this subsection (a) of this Section 3, the following acquisitions shall not constitute a Change in Control of the Company: (i) any acquisition directly from the Company, (ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any entity controlled by the Company, or (iv) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii) and (iii) of subsection (c) of this Section 3; or | |||
(b) | Individuals who, as of the Grant Date, constitute the Board of Directors (the Incumbent Board ) cease for any reason to constitute at least a majority of the Board of Directors; provided , however , that any individual becoming a director subsequent to the Grant Date whose election, or nomination for election by the Companys stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result |
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of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Covered Person other than the Board; or
(c) | Consummation of (xx) a reorganization, merger or consolidation or sale of the Company or any subsidiary of the Company, or (yy) a disposition of all or substantially all of the assets of the Company (a Business Combination ), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, direct or indirectly, more than 65% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Companys assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership immediately prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (ii) no Covered Person (excluding any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 35% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation, except to the extent that such ownership existed prior to the Business Combination, and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or, if earlier, of the action of the Board of Directors, providing for such Business Combination. |
4. | Exercise of Options . The Option may be exercised from time to time as to the total number of shares that may then be issuable upon the exercise thereof or any portion thereof by the Director, a Permitted Assignee (as defined in Section 5) with the consent of the Committee, or, in the event of the death or disability of the Director, the Directors executors, administrators, guardian or legal representative by giving written notice of such exercise to the Company or its designated agent in substantially the form attached hereto as Exhibit A . | |||
5. | Assignment . The Option may not be transferred or assigned in any manner by the Director except by will or the laws of descent and distribution or pursuant to a qualified domestic relations order (as defined in Section 401(a)(13) of the Internal Revenue Code of 1986, as amended, or Section 206(d)(3) of the Employee Retirement Income Security Act of 1974, as amended), and shall be exercisable during the Directors lifetime only by him or her (or, if under a qualified domestic relations order, his or her alternate payee). Notwithstanding the foregoing, a Participant may assign or transfer the Option with the consent of the Committee (i) for charitable donations; (ii) to the Directors spouse, children or grandchildren (including any adopted and stepchildren and grandchildren), or (iii) to a trust for the benefit of the |
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Director or the persons referred to in clause (ii) (each transferee thereof, a Permitted Assignee ); provided that such Permitted Assignee shall be bound by and subject to all of the terms and conditions of the Plan and this Agreement and shall execute an agreement satisfactory to the Company evidencing such obligations; and provided further that such Director shall remain bound by the terms and conditions of the Plan.
6. | Requirements of Law . The Company shall not be required to sell or issue any shares on the exercise of the Option if the issuance of such shares shall constitute a violation by the Director or the Company of any provisions of any law or regulation of any governmental authority. The Option shall be subject to the requirements that, if at any time the Board of Directors of the Company or the Committee shall determine that the listing, registration or qualification of the shares subject thereto upon any securities exchange or under any state or federal law of the United States or of any other country or governmental subdivision thereof, or the consent or approval of any governmental regulatory body, or investment or other representations, are necessary or desirable in connection with the issue or purchase of shares subject thereto, the Option may not be exercised in whole or in part unless such listing, registration, qualification, consent, approval or representation shall have been effected or obtained free of any conditions not acceptable to the Board of Directors. If required at any time by the Board of Directors or the Committee, the Option may not be exercised until the Director has delivered an investment letter to the Company. In addition, specifically in connection with the Securities Act of 1933 (as now in effect or hereafter amended) (the Act ), upon exercise of the Option, the Company shall not be required to issue the underlying shares unless the Committee has received evidence satisfactory to it to the effect that the Director will not transfer such shares except pursuant to a registration statement in effect under the Act or unless an opinion of counsel satisfactory to the Committee has been received by the Company to the effect that such registration is not required. Any determination in this connection by the Committee shall be final, binding and conclusive. In the event the shares issuable on exercise of the Option are not registered under the Act, the Company may imprint on the certificate for such shares the following legend or any other legend that counsel for the Company considers necessary or advisable to comply with the Act: |
The shares of stock represented by this certificate have not been registered under the Securities Act of 1933 or under the securities laws of any state and may not be sold or transferred except upon such registration or upon receipt by the Corporation of an opinion of counsel satisfactory to the Corporation, in form and substance satisfactory to the Corporation, that registration is not required for such sale or transfer.
The Company may, but shall in no event be obligated to, register any securities covered hereby pursuant to the Act. The Company shall not be obligated to take any other affirmative action to cause the exercise of the Option or the issuance of Shares pursuant thereto to comply with any law or regulation of any governmental authority.
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7. | Termination . The Option, to the extent it shall not previously have been exercised, shall terminate on the earlier of the following unless the Committee extends the term of this Option to a period not extending beyond the Expiration Date: |
(a) | Three years after the date of the severance of the service relationship between the Company (and all of its Subsidiaries) and the Director, whether with or without cause and for any reason. Effective as of the Directors termination of service, the Director shall cease vesting in his Option but during the three-year period following his termination of service, the Director shall be entitled to exercise his vested Option in respect of the number of shares that the Director would have been entitled to purchase had the Director exercised the Option on the date of such termination of service. If the Director should die within such three-year period, the Directors executor, administrator, or the person to whom the Option shall be transferred by the Directors will or the laws of descent and distribution shall have until the end of the original three-year time period to exercise the Directors vested Option in respect of the number of shares that the Director would have been entitled to purchase had the Director exercised the Option on the date of the Directors termination of service. | |||
(b) | On the Expiration Date. |
8. | Amendment and Waiver . Except as otherwise provided in Section 12.1 of the Plan, this Agreement may be amended, modified or superseded only by written instrument executed by the Company and the Director. Only a written instrument executed and delivered by the party waiving compliance hereof shall make any waiver of the terms or conditions effective. Any waiver granted by the Company shall be effective only if executed and delivered by a duly authorized executive officer of the Company. The failure of any party at any time or times to require performance of any provisions hereof shall in no manner affect the right to enforce the same. No waiver by any party of any term or condition, or of any breach of any term or condition, contained in this Agreement, in one or more instances, shall be construed as a continuing waiver of any such condition or breach, a waiver of any other term or condition, or a waiver of any breach of any other term or condition. | |||
9. | No Rights as a Stockholder . The Director shall not have any rights as a stockholder with respect to any Shares issuable upon the exercise of the Option until the date of issuance of the stock certificate or certificates representing such Shares following the Directors exercise of the Option pursuant to its terms and conditions and payment for such Shares. Except as otherwise provided in the Plan, no adjustment shall be made for dividends or other distributions made with respect to the Common Stock the record date for the payment of which is prior to the date of issuance of the stock certificate or certificates representing such shares following the Directors exercise of the Option. | |||
10. | No Fractional Shares . All provisions of this Agreement concern whole Shares. Notwithstanding anything contained in this Agreement to the contrary, if the application of any provision of this Agreement would yield a fractional share, such fractional share shall be rounded down to the next whole Share. |
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11. | Governing Law and Severability . This Agreement shall be governed by the laws of the State of Delaware without regard to its conflicts of law provisions. The invalidity of any provision of this Agreement shall not affect any other provision of this Agreement, which shall remain in full force and effect. | |||
12. | Notices . Any notice, instruction, authorization, request or demand required hereunder shall be in writing, and shall be delivered either by personal delivery, by telegram, telex, telecopy or similar facsimile means, by certified or registered mail, return receipt requested, by facsimile transmission or by courier or delivery service, to the Company at 4510 Lamesa Hwy., Snyder, Texas 79549, Attention: Chief Financial Officer, facsimile number (325) 574-6307, and to the Director at the Directors address and facsimile number (if applicable) indicated beneath the Directors signature on the execution page of this Agreement, or at such other address and facsimile number as a party shall have previously designated by written notice given to the other party in the manner hereinabove set forth. Notices shall be deemed given when received, if sent by facsimile means (confirmation of such receipt by confirmed facsimile transmission being deemed receipt of communications sent by facsimile means); and when delivered (or upon the date of attempted delivery where delivery is refused), if hand-delivered, sent by express courier or delivery service, or sent by certified or registered mail, return receipt requested. | |||
13. | No Obligation to Retain Services . This Agreement is not a services or employment agreement, and no provision of this Agreement shall be construed or interpreted to create a services or employment relationship between the Director, the Company or any of its Subsidiaries or guarantee the Director the right to remain a director of the Company for any specified term. | |||
14. | Successors and Assigns . Except as otherwise provided to the contrary in this Agreement or in the Plan, this Agreement shall bind, be enforceable by and inure to the benefit of the Company, its Subsidiaries, and their successors and assigns, and to the Director, the Directors Permitted Assignees, executors, administrators, agents, legal and personal representatives. | |||
15. | Grant Subject to Terms of Plan and this Agreement. The Director acknowledges and agrees that the grant of the Option hereunder is made pursuant to and governed by the terms of the Plan and this Agreement, ratifies and consents to any action taken by the Company, the Board of Directors or the Committee concerning the Plan and agrees that the grant of the Option pursuant to this Agreement is subject in all respects to the more detailed provisions of the Plan. | |||
16. | Counterparts . This Agreement may be executed in two or more counterparts, each of which shall be an original for all purposes but all of which taken together shall constitute but one and the same instrument. |
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17. | Non-Incentive Stock Option . The Option is not intended to qualify as an incentive stock option as defined in Section 422 of the Internal Revenue Code of 1986, as amended. |
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IN WITNESS WHEREOF , this Agreement has been duly executed and delivered as of the day and year first above mentioned.
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EXHIBIT A
PATTERSON-UTI ENERGY, INC. 2005 LONG-TERM INCENTIVE PLAN
Exercise of Stock Option
Patterson-UTI Energy, Inc.
4510 Lamesa Highway
P.O. Box 1416
Snyder, TX 79550
Attention: Chief Financial Officer
Dear Sir or Madam:
The undersigned Optionee, ___, hereby exercises the Option granted to him pursuant to the Patterson-UTI Energy, Inc. 2005 Long-Term Incentive Plan dated as of ___, 20___ between Patterson-UTI Energy, Inc. (the Company) and the Optionee with respect to ___ Shares of common stock, $0.01 par value per share, of the Company covered by said Option, and tenders, and tenders herewith the following form of payment [check all that apply]:
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Check for $___, payable to Patterson-UTI Energy, Inc. | |
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Certificate(s) for ___shares of Common Stock of the Company that I have owned for at least six months or have purchased in the open market. (These shares will be valued as of the date when the Company receives this notice.) | |
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Attestation Form covering shares of Common Stock of the Company. (These shares will be valued as of the date when the Company receives this notice.) |
The exact legal name and registered address on such certificate should be ________________ :
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The Optionees social security number is: .
ACKNOWLEDGMENTS:
1. | I understand that all sales of purchased Shares are subject to compliance with the Companys policy on securities trades, and I acknowledge that the Company has encouraged me to consult my own adviser to determine the form of ownership that is appropriate for me. | |||
2. | I hereby acknowledge that I received and read a copy of the prospectus describing Patterson-UTIs 2005 Long-Term Incentive Plan and the tax consequences of an exercise. | |||
3. | I understand that I must recognize ordinary income equal to the excess of the fair market value of the purchased Shares on the date of exercise and the exercise price. |
OPTIONEES SIGNATURE
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Exhibit 99.1
DESCRIPTION OF CAPITAL STOCK
The following description of our capital stock is qualified in its entirety by reference to the Patterson-UTI Energy, Inc. Restated Certificate of Incorporation, as amended (the Restated Certificate of Incorporation), and Amended and Restated Bylaws.
General
Patterson-UTI Energy, Inc., a Delaware corporation (Patterson-UTI), is authorized by its Restated Certificate of Incorporation to issue 300,000,000 shares of common stock, $0.01 par value per share (the Common Stock), and 1,000,000 shares of preferred stock, $0.01 par value per share (the Preferred Stock), of which 100,000 have been designated as Series A Participating Preferred Stock.
Common Stock
Voting Rights
The holders of Patterson-UTI Common Stock are entitled to one vote for each share held of record on all matters submitted to a vote of stockholders, including the election of directors. Holders of Patterson-UTI Common Stock do not have cumulative voting rights.
Dividends
The holders of Patterson-UTI Common Stock are entitled to receive dividends when, as and if declared by the Patterson-UTI board of directors out of funds legally available therefor. However, if any shares of Patterson-UTI Preferred Stock are at the time outstanding, the payment of dividends on Patterson-UTI Common Stock or other distributions (including Patterson-UTIs repurchase of Patterson-UTI Common Stock) will be subject to the declaration and payment of all cumulative dividends on outstanding shares of Patterson-UTI Preferred Stock.
Liquidation
In the event of the dissolution, liquidation or winding up of Patterson-UTI, the holders of Patterson-UTI Common Stock will be entitled to share ratably in any assets remaining after the satisfaction in full of the prior rights of creditors, including holders of Patterson-UTI indebtedness, and the payment of the aggregate liquidation preference of the Preferred Stock.
Other Rights
The holders of Patterson-UTI Common Stock do not have any conversion, redemption or preemptive rights.
Transfer Agent and Registrar
The transfer agent and registrar for Patterson-UTI Common Stock is Continental Stock Transfer & Trust Company, New York, New York.
Listing
Outstanding shares of Patterson-UTI common stock are traded on the Nasdaq National Market under the symbol PTEN.
Preferred Stock
The Patterson-UTI board of directors can, without approval of its stockholders, issue one or more additional series of Preferred Stock and determine the number of shares of each series and the rights, preferences and limitations of each series by appropriate board resolutions. The terms of the Preferred Stock will be subject to and qualified by the certificate of designation relating to any applicable series of Preferred Stock. Undesignated Preferred Stock may enable the Patterson-UTI board of directors to render more difficult or to discourage an attempt to obtain control of Patterson-UTI by means of a tender offer, proxy contest, merger or otherwise, and to thereby protect the continuity of Patterson-UTIs management. As a result, the issuance of shares of a series of Preferred Stock may discourage bids for Patterson-UTI Common Stock or may otherwise adversely affect the market price of Patterson-UTI Common Stock or any other of Patterson-UTI Preferred Stock. The issuance of shares of Preferred Stock may also adversely affect the rights of the holders of Patterson-UTI Common Stock. For example, any Preferred Stock issued may rank prior to Patterson-UTI Common Stock as to dividend rights, liquidation preference or both, may have full or limited voting rights and may be convertible into Patterson-UTI Common Stock or other securities.
Officer and Director Indemnification
Patterson-UTIs Restated Certificate of Incorporation provides that, to the fullest extent permitted by the Delaware General Corporation Law (the DGCL), a director of Patterson-UTI will not be liable to Patterson-UTI or its stockholders for monetary damages for breach of fiduciary duty as a director. Patterson-UTIs Amended and Restated Bylaws provide that, to the maximum extent and in the manner permitted by the DGCL, Patterson-UTI shall indemnify its directors, officers, employees and agents against expenses (including attorneys fees), judgments, fines, settlements and other amounts actually and reasonably incurred in connection with any proceeding arising by reason of the fact that such person is or was an agent of Patterson-UTI, provided, however, that Patterson-UTI may modify the extent of such indemnification by individual contracts with its directors and officers and, provided, further, that Patterson-UTI shall not be required to indemnify any director or officer in connection with any proceeding (or part thereof) initiated by such person unless (i) such indemnification is expressly required to be made by law, (ii) the proceeding was authorized in advance by the board of directors of Patterson-UTI, (iii) such indemnification is provided by Patterson-UTI, in its sole discretion, pursuant to the powers vested in Patterson-UTI under the DGCL or (iv) such indemnification is required to be made pursuant to an individual contract. Patterson-UTIs Amended and Restated Bylaws also provide that Patterson-UTI may advance the payment of expenses, upon receipt of an undertaking by or on behalf of such person to repay such amounts if it should be determined ultimately that such person is not entitled to be indemnified under the bylaws or otherwise, and that the indemnification and advancement of expense provisions of the bylaws are nonexclusive. Patterson-UTI maintains director and officer liability insurance covering director and officer indemnification.
Patterson-UTI has entered into an indemnification agreement with each of its executive officers and directors containing provisions that may require Patterson-UTI, among other things, to indemnify such executive officers and directors against liabilities that may arise by reason of their status or service as executive officers or directors (subject to certain exceptions) and to advance expenses incurred as a result of any proceeding against them as to which they could be indemnified.
Board of Directors
Patterson-UTIs Amended and Restated Bylaws provide that the number of members of the Board of Directors of Patterson-UTI shall be fixed either by amendment to the Amended and Restated Bylaws or by resolution of the Board of Directors. Directors are elected to serve until the next annual meeting of stockholders or until their successors are elected and qualified. Patterson-UTIs bylaws provide that the affirmative vote of a plurality of the votes cast at the meeting at which a quorum is present is required for the election of directors.
Provisions Having a Possible Anti-Takeover Effect
Section 203 of Delaware General Corporation Law
As a Delaware corporation, Patterson-UTI is subject to Section 203 of the DGCL. Subject to limited exceptions, Section 203 of the DGCL prohibits business combinations, including certain mergers, sales and leases of assets, issuances of securities and similar transactions by a corporation or a subsidiary with an interested stockholder who beneficially owns 15% or more of a corporations voting stock, within three years after the person or entity becomes an interested stockholder, unless: (1) the transaction that will cause the person to become an interested stockholder is approved by the board of directors of the corporation prior to the transaction, (2) after the completion of the transaction in which the person becomes an interested stockholder, the interested stockholder holds at least 85% of the voting stock of the corporation not including (a) shares held by officers and directors of the interested stockholder and (b) shares held by specified employee benefit plans, or (3) at or subsequent to such time the person becomes an interested stockholder, the business combination is approved by the board of directors and holders of at least 66 2/3% of the outstanding voting stock, excluding shares held by the interested stockholder.
Special Meetings of Stockholders
The Restated Certificate of Incorporation provides that special meetings of stockholders may be called only by the Patterson-UTI board of directors (or a majority of the members thereof), the chief executive officer, the president or the holders of a majority of the outstanding stock entitled to vote at such special meeting. This provision will make it more difficult for Patterson-UTI stockholders to call a special meeting.
No Stockholder Action by Written Consent
The Restated Certificate of Incorporation provides that stockholder action may be taken only at annual or special meetings and not by written consent of the stockholders.