UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Form 10-K/A
| (Mark One) | ||
| þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) | |
| OF THE SECURITIES EXCHANGE ACT OF 1934 | ||
| For the fiscal year ended December 31, 2003 | ||
| or | ||
| o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) | |
| OF THE SECURITIES EXCHANGE ACT OF 1934 | ||
| For the transition period from to | ||
Commission file number 0-22664
Patterson-UTI Energy, Inc.
| Delaware | 75-2504748 | |
|
(State or other jurisdiction of
incorporation or organization) |
(I.R.S. Employer
Identification No.) |
|
| 4510 Lamesa Highway, Snyder, Texas | 79549 | |
| (Address of principal executive offices) | (Zip Code) | |
Registrant’s telephone number, including area code:
Securities Registered Pursuant to 12(b) of the Act:
Securities Registered Pursuant to 12(g) of the Act:
Common Stock, $.01 Par Value
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes þ No o
The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant as of June 30, 2003, the last business day of the registrant’s most recently completed second fiscal quarter was $2,441,241,719, calculated by reference to the closing price of $32.37 for the common stock on the Nasdaq National Market on that date.
As of April 26, 2004, the registrant had outstanding 83,165,420 shares of common stock, $.01 par value, its only class of voting stock.
EXPLANATORY NOTE
This Amendment No. 1 on Form 10-K/ A to
Patterson-UTI Energy, Inc.’s Annual Report on
Form 10-K for the year ended December 31, 2003
(“Form 10-K”) is being filed to provide the
information in Items 10, 11, 12, 13 and 14 of Part III
of the Form 10-K.
PART III
We refer to Patterson-UTI Energy, Inc. as the
“Company” or “Patterson-UTI”.
Board of Directors
Set forth below is the name, age, position and a
brief description of the business experience during at least the
past five years of each of the members of the
Company’s Board of Directors.
Mark S.
Siegel
— Mr. Siegel has
served as Chairman of the Board and as a director of
Patterson-UTI since May 2001. Mr. Siegel served as Chairman
of the Board and as a director of UTI Energy Corp.
(“UTI”) from 1995 to May 2001, when UTI merged with
and into Patterson-UTI. Mr. Siegel has been President of
REMY Investors & Consultants, Incorporated (“REMY
Investors”) since 1993. From 1992 to 1993, Mr. Siegel
was President, Music Division, Blockbuster Entertainment Corp.
From 1988 through 1992, Mr. Siegel was an Executive Vice
President of Shamrock Holdings, Inc., a private investment
company, and Managing Director of Shamrock Capital Advisors,
Incorporated. Mr. Siegel is also Chairman of the Board and
a director of Variflex Inc., a consumer products company.
Mr. Siegel holds a Bachelor of Arts degree from Colgate
University and a J.D. from the University of California,
Berkeley (Boalt Hall) School of Law.
Cloyce A.
Talbott
— Mr. Talbott
has served as a director of Patterson-UTI since its
incorporation in 1978 and as its Chief Executive Officer since
1983. Mr. Talbott co-founded Patterson-UTI, served as Vice
President from 1978 to 1983, and served as Chairman of the Board
from 1983 to May 2001. Mr. Talbott holds a Bachelor of
Science degree in petroleum engineering from Texas Tech
University.
A. Glenn
Patterson
—
Mr. Patterson has served as a director of Patterson-UTI
since its incorporation in 1978. Mr. Patterson co-founded
Patterson-UTI and has served as its President since 1978 and
also as Chief Operating Officer since 1983. Mr. Patterson
holds a Bachelor of Science degree in business from Angelo State
University.
Kenneth N.
Berns
— Mr. Berns has
served as Senior Vice President of Patterson-UTI since April
2003 and as a director of Patterson-UTI since May 2001.
Mr. Berns served as a director of UTI from 1995 to May
2001. Mr. Berns has been an executive with REMY Investors
since 1994. Mr. Berns is also a director of Variflex Inc.
Mr. Berns holds a Bachelors Degree in Business
Administration from San Diego State University and a
Masters Degree in Taxation from Golden Gate University.
Robert C.
Gist
— Mr. Gist has
served as a director of Patterson-UTI since 1985. He was general
legal counsel and advisor to Patterson-UTI from 1987 to May
2001. Mr. Gist holds a Bachelor of Science degree in
economics and a J.D. from Southern Methodist University. He has
been self-employed as an attorney for more than five years
and has over 20 years experience in the oil and gas
industry.
1
Curtis W.
Huff
— Mr. Huff has
served as a director of Patterson-UTI since May 2001 and served
as a director of UTI from 1997 to May 2001. Mr. Huff is the
President and Chief Executive Officer of Freebird Investments
LLC, a private investment company, and has served in that
capacity since October 2002. Mr. Huff served as the
President and Chief Executive Officer of Grant Prideco, Inc., a
provider of drill pipe and other drill stem products, from
February 2001 to June 2002. From January 2000 to February 2001,
Mr. Huff served as Executive Vice President, Chief
Financial Officer and General Counsel of Weatherford
International, Inc., an oilfield services company. He served as
Senior Vice President and General Counsel of Weatherford from
May 1998 to January 2000. Prior to that time, Mr. Huff was
a partner with the law firm of Fulbright & Jaworski
L.L.P. and held that position for more than five years.
Terry H.
Hunt
— Mr. Hunt has
served as a director of Patterson-UTI since April 2003 and
served as a director of UTI from 1994 to May 2001. Mr. Hunt
is an energy consultant and investor. Mr. Hunt served as
Senior Vice President — Strategic Planning of PPL
Corporation, an international energy and utility holding
company, from 1998 to 2000. Mr. Hunt served as the
President and Chief Executive Officer of Penn Fuel Gas, Inc., a
natural gas and propane distribution company, from 1992 to 1999.
From 1989 to 1992, Mr. Hunt was President and Chairman of
Carnegie Natural Gas Company, a gas distribution and
transportation company, and of Apollo Gas Company, a natural gas
distributor. Mr. Hunt holds a Bachelor of Engineering
degree from the University of Saskatchewan, Canada and a Masters
of Business Administration from Southern Methodist University.
Kenneth R.
Peak
— Mr. Peak has
served as a director of Patterson-UTI since November 2000.
Mr. Peak is the Chairman of the Board, President, Chief
Executive Officer and Chief Financial Officer of Contango
Oil & Gas Company and has served in that capacity since
1999. Mr. Peak served as the President of Peak Enernomics,
Incorporated, an oil and gas industry consulting company, from
1990 to 1999. Prior to that time Mr. Peak served as the
Treasurer of Tosco Corporation, an independent oil refiner, and
as Chief Financial Officer of Texas International Company, an
independent oil and gas exploration and production company. His
tenure at Texas International Company included serving as
President of TIPCO, the domestic operating subsidiary of Texas
International’s oil and natural gas operations.
Mr. Peak’s energy career began in 1973 as a commercial
banker with First Chicago’s energy group. Mr. Peak
holds a Bachelor of Science degree in physics from Ohio
University and a Masters of Business Administration from
Columbia University.
Nadine C.
Smith
— Ms. Smith has
served as a director of Patterson-UTI since May 2001 and served
as a director of UTI from 1995 to May 2001. Ms. Smith is a
private investor and business consultant. From August 2000 to
December 2001, Ms. Smith was President of Final
Arrangements, LLC, a company providing software and web-based
internet services to the funeral industry. From April 2000 to
August 2000, Ms. Smith served as the President of Aegis
Asset Management, Inc., an asset management company. From 1997
to April 2000, Ms. Smith was President and Chief Executive
Officer of Enidan Capital Corp., an investment company.
Previously, Ms. Smith was an investment banker and
principal with NC Smith & Co. and The First Boston
Corporation and a management consultant with McKinsey &
Co. Ms. Smith is a director of American Retirement
Corporation, a New York Stock Exchange listed company that
owns and manages senior housing properties. Ms. Smith holds
a Bachelor of Science degree in economics from Smith College and
a Masters of Business Administration from Yale University.
Executive Officers
Set forth below is the name, age and position
followed by a brief description of the business experience
during at least the past five years for each of the executive
officers of Patterson-UTI who is not also a member of the Board
of Directors.
Jonathan D.
Nelson
— Mr. Nelson has
served as Vice President, Chief Financial Officer, Secretary and
Treasurer of Patterson-UTI since July 1999. Mr. Nelson
served as Controller of Patterson-UTI from May 1996 until July
1999. Prior to his employment with Patterson-UTI,
Mr. Nelson was employed in public
2
John E.
Vollmer III
—
Mr. Vollmer has served as Senior Vice President —
Corporate Development of Patterson-UTI since May 2001.
Mr. Vollmer served as Senior Vice President, Chief
Financial Officer, Secretary and Treasurer of UTI from 1998 to
May 2001. Mr. Vollmer was a financial consultant from
October 1997 until joining UTI in 1998. From 1992 until October
1997, Mr. Vollmer served in a variety of capacities at
Blockbuster Entertainment, including Senior Vice
President — Finance and Chief Financial Officer of
Blockbuster Entertainment’s Music Division.
Mr. Vollmer holds a Bachelor of Arts in Accounting from
Michigan State University.
There are no arrangements or understandings
between any person and any of the directors or executive
officers pursuant to which such person was selected as a
director, executive officer or nominee. There are no family
relationships among any of the directors or executive officers
of Patterson-UTI, other than between Messrs. Talbott and
Patterson, who are brothers-in-law.
Audit Committee Matters
The Board of Directors has a standing Audit
Committee. The Board has confirmed that all members of the Audit
Committee are “independent” within the meaning of
Item 7(d)(3)(iv) of Schedule 14A under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”).
The Audit Committee members are Messrs. Peak and Gist and
Ms. Smith. The Board of Directors has determined that
Mr. Peak is an “audit committee financial expert”
within the meaning of applicable Securities and Exchange
Commission (“SEC”) rules.
Section 16(a) Beneficial Ownership
Reporting Compliance
Section 16(a) of the Exchange Act requires
Patterson-UTI’s officers and directors, and persons who own
more than 10% of a registered class of Patterson-UTI’s
equity securities to file reports of ownership and changes in
ownership with the SEC. Each of these persons is required by SEC
regulation to furnish Patterson-UTI with copies of
Section 16(a) filings.
Based solely on its review of copies of such
forms received by it, Patterson-UTI believes that during the
year ended December 31, 2003, its officers and directors,
other than Mr. Stephen J. DeGroat, and beneficial owners of
more than ten percent of a registered class of its equity
securities complied with all applicable filing requirements.
Mr. DeGroat failed to timely file a Form 4 related to
a sale of common stock prior to his cessation of directorship on
April 30, 2003.
Code of Ethics
With respect to its executive management,
Patterson-UTI has adopted a Code of Business Conduct and Ethics
for Senior Financial Executives to ensure that the Company
maintains the highest integrity with respect to the preparation
and reporting of financial information related to the Company.
This Code applies to the Chief Executive Officer, all Senior
Vice Presidents, the Chief Financial Officer, the Chief
Accounting Officer, the Controller, and persons performing
similar functions. The Code is filed as Exhibit 14.1 to the
Company’s Form 10-K.
3
Compensation of Executive Officers
The following table sets forth information
concerning compensation for 2003, 2002 and 2001 earned by or
paid to the Chief Executive Officer and other executive officers
of Patterson-UTI:
4
The following table sets forth information
regarding grants of stock options to the executive officers
listed in the Summary Compensation Table during 2003:
Options Granted During Fiscal Year
2003
The following table sets forth information
concerning stock options exercised in 2003 and stock options
unexercised at December 31, 2003 for the executive officers
of Patterson UTI:
Aggregated Option Exercises in 2003 and Value
Table at December 31, 2003
Compensation of Directors
Directors who are also employees of the Company
do not receive compensation for serving as a director or as a
member of a committee of the Board of Directors. All directors
are reimbursed for reasonable out-of-pocket expenses incurred in
connection with attendance at Board of Directors meetings and
committee meetings. Each non-employee director receives annual
cash compensation of $35,000. Each non-employee
5
The Company maintains a Non-Employee Director
Stock Option Plan (the “Director Plan”). Under the
Director Plan, each non-employee director is granted options to
purchase 20,000 shares of common stock, $0.01 par
value per share, of the Company (the “Common Stock”)
upon becoming a director and is granted options to purchase
10,000 shares of Common Stock on the last business day of
each subsequent year in which the director serves on the Board
of Directors.
Change-in-Control Arrangements; Employment
Contracts; Indemnification Agreements
On January 29, 2004, the Company entered
into change in control agreements (each, an
“Agreement” and collectively, the
“Agreements”) with Messrs. Siegel, Talbott,
Patterson, Berns, Nelson and Vollmer, (each, an “Employee
and collectively, the “Employees”). The Agreements
were entered into to protect the Employees should a change in
control occur, thereby encouraging the Employee to remain in the
employ of the Company and not be distracted from the performance
of his duties to the Company by the possibility of a change in
control.
In the event of a change in control of the
Company in which an Employee’s employment is terminated by
the Company other than for cause or by the Employee for good
reason, the terms of the Agreement would entitle the Employee
to, among other things:
Each Agreement provides the Employee with a full
gross-up payment for any excise taxes imposed on payments and
benefits received under the Agreements or otherwise including
other taxes that may be imposed as a result of the gross-up
payment.
A change in control is principally defined by the
Agreement as:
The Agreements terminate on the first to occur of:
6
Messrs. Siegel, Berns and Vollmer have
employment arrangements which entitle them to one year’s
salary upon termination of employment with the Company.
All unvested stock options held by executive
officers vest upon a change of control as defined by the
underlying stock option plan.
The Company has entered or will enter into an
indemnification agreement with each of our executive officers
and directors containing provisions that may require the
Company, among other things, to indemnify the Company’s
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.
Securities Authorized for Issuance Under
Equity Compensation Plans
The following information summarizes as of
December 31, 2003 certain information regarding equity
compensation to our employees, officers, directors, and other
persons under our stock option plans.
7
Security Ownership of Certain Beneficial
Owners and Management
The following table sets forth, as of
April 26, 2004, the stock ownership of (i) the
executive officers, directors and Board nominees individually,
(ii) all directors, Board nominees and executive officers
as a group and (iii) each person known by Patterson-UTI to
be the beneficial owner of more than 5% of Patterson-UTI’s
Common Stock.
8
Except as stated herein, each stockholder has
sole voting and investment power with respect to Common Stock
included in the above table. There are no arrangements known to
Patterson-UTI which may at a subsequent date result in a change
in control of Patterson-UTI.
Certain Transactions
In connection with the acquisition by REMY
Capital of an ownership interest in UTI in March 1995, REMY
Capital succeeded to a registration rights agreement with UTI.
As the successor-in-interest to UTI, Patterson-UTI assumed this
registration rights agreement pursuant to which REMY Capital has
the right to require Patterson-UTI to use its reasonable efforts
to register shares held by REMY Capital under the Securities Act
of 1933, as amended. In the event that such rights are exercised
in connection with a primary offering proposed by Patterson-UTI
(or a secondary offering with which Patterson-UTI agrees to
participate), REMY Capital would bear its pro rata share of the
costs of the offering, other than legal, accounting and printing
costs, all of which Patterson-UTI would bear. In the event that
REMY Capital elected to exercise such rights other than in
connection with an offering in which Patterson-UTI participates,
REMY Capital would bear all costs of the offering. These rights
continue so long as REMY Capital continues to own the Common
Stock that it acquired in March 1995.
Mr. Siegel, Chairman of the Board of
Patterson-UTI, is President and sole stockholder of REMY
Investors, which is the general partner of REMY Capital.
Mr. Berns, a director and Senior Vice-President of
Patterson-UTI, is an executive of REMY Investors.
During 2003, Patterson-UTI paid approximately
$740,000 to TMP Truck and Trailer LP (“TMP”), an
entity owned by Thomas M. Patterson, son of A. Glenn Patterson,
Patterson-UTI’s President and Chief
9
During 2003, Patterson-UTI paid approximately
$209,000 to Melco Services (“Melco”) for dirt
contracting services and $59,000 to L&N Transportation
(“L&N”) for water hauling services. Both entities
are owned by Lance D. Nelson, brother of Jonathan D. Nelson,
Patterson-UTI’s Vice President, Chief Financial Officer,
Secretary and Treasurer. Purchases from Melco and L&N were
at current market prices. Melco and L&N continue to be
vendors to Patterson-UTI in 2004.
The Company operates certain oil and natural gas
properties in which certain of our affiliated persons have
participated, either individually or through entities they
control, in the prospects or properties in which we have an
interest. These participations, which have been on a working
interest basis, have been in prospects or properties originated
or acquired by Patterson-UTI. At December 31, 2003,
affiliated persons were working interest owners of 236 of the
260 wells operated by Patterson-UTI. Sales of working
interests are made by Patterson-UTI to reduce its economic risk
in the properties. Generally, it is more efficient for
Patterson-UTI to sell the working interests to these affiliated
persons than to market them to unrelated third parties. Sales
were made by Patterson-UTI at its cost, comprised of
Patterson-UTI’s costs of acquiring and preparing the
working interests for sale. These costs were paid by the working
interest owners on a pro rata basis based upon their working
interest ownership percentage. The price at which working
interests were sold to affiliated persons was the same price at
which working interests were sold to unaffiliated persons.
The following table sets forth production
revenues received and joint interest costs of each of the
affiliated persons during 2003 for all wells operated by
Patterson-UTI in which they have working interests. These
amounts do not necessarily represent their profits or losses
from these interests because the joint interest costs do not
include the parties’ related drilling and leasehold
acquisition costs incurred prior to January 1, 2003. These
activities resulted in a net receivable from the affiliated
persons of approximately $17,000 at December 31, 2003 and a
net payable to the affiliated persons of approximately $466,000
at December 31, 2002.
10
In 2003 and 2002, PricewaterhouseCoopers LLP
billed the Company and its subsidiaries for the aggregate fees
set forth in the table below. These fees include all fees
incurred by the Company for (i) professional services
rendered for the audit of the Company’s annual financial
statements and review of quarterly financial statements,
(ii) assurance and related services that are reasonably
related to the performance of the audit or review of the
Company’s financial statements, (iii) professional
services rendered for tax compliance, tax advice, and tax
planning, and (iv) products and services provided by
PricewaterhouseCoopers LLP.
The Audit Committee approves the appointment of
the independent audit firm. The Audit Committee or
Mr. Peak, as Chairman of the Audit Committee, approves all
other engagements of the independent audit firm in advance. In
the event Mr. Peak approves any such engagement, he
discusses such approval with the Audit Committee at the next
meeting.
Fiscal 2003
“Audit Fees” relate to audit services
of PricewaterhouseCoopers LLP for Fiscal 2003 consisting of the
examination of the consolidated financial statements of the
Company and quarterly review of financial statements.
“Audit-Related Fees” includes reading of the
Company’s registration statement and consultation on the
Company’s SEC comment letter related to the acquisition of
TMBR/ Sharp Drilling, Inc. “Tax Fees” includes
Federal, state and foreign income tax compliance and related
matters. “All Other Fees” includes consultation
related to Sarbanes Oxley matters. The Audit Committee or
Mr. Peak, as Chairman of the Audit Committee, approved all
of the services described above.
Fiscal 2002
“Audit Fees” relate to audit services
of PricewaterhouseCoopers LLP for Fiscal 2002 consisting of the
examination of the consolidated financial statements of the
Company and quarterly review of financial statements.
“Audit-Related Fees” includes consultation on the
appropriate accounting method related to the acquisition of
TMBR/ Sharp Drilling, Inc. “Tax Fees” includes
Federal, state and foreign income tax
11
The Audit Committee has discussed the non-audit
services provided by PricewaterhouseCoopers LLP and the related
fees and has considered whether those services and fees are
compatible with maintaining auditor independence. The Audit
Committee determined that such non-audit services were
consistent with the independence of PricewaterhouseCoopers LLP.
PART IV
(a)(1)
Financial Statements
(a)(2)
Financial Statement Schedule
All other financial statement schedules have been
omitted because they are not applicable or the information
required therein is included elsewhere in the financial
statements or notes thereto.
(a)(3)
Exhibits
The following exhibits are filed herewith or
incorporated by reference herein.
12
13
(b)
Reports on Form 8-K.
On December 31, 2003, the Company filed a
Current Report on Form 8-K, dated December 30, 2003,
reporting the amendment to its Agreement and Plan of Merger with
TMBR/ Sharp Drilling, Inc. to extend the date under which the
parties had certain rights of termination to February 14,
2004 from December 31, 2003.
14
Item 10.
Directors and Executive Officers of the
Registrant.
Name
Age
Position
53
Chairman of the Board and Director
68
Chief Executive Officer and Director
57
President, Chief Operating Officer and Director
44
Senior Vice President and Director
63
Director
46
Director
55
Director
58
Director
46
Director
Name
Age
Position
35
Vice President, Chief Financial Officer,
Secretary and Treasurer
48
Senior Vice President — Corporate
Development
Item 11.
Executive Compensation.
Annual Compensation
Securities
Underlying
Other Annual
Options
All Other
Name and Principal
Salary
Bonus
Compensation(1)
Granted
Compensation(2)
Position(s)
Year
($)
($)
($)
(#)
$
2003
298,333
411,530
—
190,000
—
2002
180,833
140,000
—
400,000
—
2001
160,577
300,000
—
250,000
—
2003
413,750
411,530
—
190,000
4,935
2002
316,458
140,000
—
400,000
6,000
2001
317,500
375,000
—
250,000
5,250
2003
413,750
411,530
—
190,000
4,935
2002
316,458
140,000
—
400,000
6,000
2001
317,500
375,000
—
250,000
5,250
2003
182,333
205,765
—
95,000
—
2002
108,500
70,000
—
200,000
—
2001
104,615
—
—
125,000
—
2003
198,667
205,765
—
95,000
3,935
2002
144,667
70,000
—
200,000
2,438
2001
157,833
150,000
—
125,000
5,250
2003
251,908
205,765
—
95,000
3,935
2002
190,779
70,000
—
200,000
5,500
2001
204,558
150,000
—
125,000
1,574
(1)
The aggregate amounts of perquisites and other
personal benefits, securities or property received by each of
the executive officers does not exceed the lesser of $50,000 or
ten percent of that executive officer’s combined annual
salary and bonus during the applicable year.
(2)
Amounts set forth for 2003, 2002 and 2001 reflect
Patterson-UTI’s (or UTI’s, as applicable)
contributions or other allocations to defined contribution plans.
(3)
These individuals were previously employed by
UTI, which merged with and into Patterson-UTI on May 8,
2001. Amounts presented herein include compensation received
from UTI prior to the merger.
Number of
% of Total
Securities
Options
Exercise
Underlying
Granted to
or Base
Options
Employees in
Price
Expiration
Grant Date
Name
Granted
Fiscal Year
($/Sh)
Date
Value(2)
190,000
(1)
22.22
%
$
32.44
4/29/13
$
3,040,304
190,000
(1)
22.22
%
$
32.44
4/29/13
$
3,040,304
190,000
(1)
22.22
%
$
32.44
4/29/13
$
3,040,304
95,000
(1)
11.11
%
$
32.44
4/29/13
$
1,520,152
95,000
(1)
11.11
%
$
32.44
4/29/13
$
1,520,152
95,000
(1)
11.11
%
$
32.44
4/29/13
$
1,520,152
(1)
These options were granted pursuant to the terms
and conditions of the Patterson-UTI Energy, Inc. Amended and
Restated 1997 Long Term Incentive Plan. These options vest over
a three (3) year period as follows: 33.33% on
April 30, 2004, and then in equal monthly installments
through April 30, 2006.
(2)
The value of the options were estimated using the
Black-Scholes option valuation model. The following assumptions
were used in the calculation: no expected dividend, risk-free
interest rate of 2.81%, volatility of 52.05% and an expected
term of 5 years. No discount was considered for the
non-transferability or the risk of forfeiture of the options.
The actual value, if any, of any option will depend on the
amount, if any, by which the stock price exceeds the exercise
price on the date the option is exercised. Thus, this valuation
may not be a reliable indication as to the value and there is no
assurance the value realized will be at or near the value
estimated by the Black-Scholes model.
Number of Securities
Underlying Unexercised
Value of Unexercised
Shares
Options at
In-the-Money Options at
Acquired
December 31, 2003(2)
December 31, 2003(3)
on
Value
Name
Exercise
Realized(1)
Exercisable
Unexercisable
Exercisable
Unexercisable
—
$
—
489,721
530,279
$
8,343,435
$
3,679,940
100,000
$
2,632,970
309,721
530,279
$
3,299,160
$
3,679,940
266,000
$
5,723,420
218,721
530,279
$
1,744,880
$
3,679,940
—
$
—
254,861
265,139
$
4,451,955
$
1,839,970
—
$
—
198,456
265,139
$
2,550,663
$
1,839,970
—
$
—
488,344
260,056
$
10,922,821
$
1,737,082
(1)
Calculated by subtracting actual option exercise
price from the market price at the respective dates of exercise
and multiplying the difference by the number of shares in each
category.
(2)
The total number of unexercised options held as
of December 31, 2003, separated between those options that
were exercisable and those options that were not exercisable.
(3)
Calculated by subtracting the actual option
exercise price from the market price at December 31, 2003
($32.93 per share) and multiplying the difference by the
number of shares in each category.
•
a bonus payment equal to the greater of the
highest bonus paid after the Agreement was entered into and the
average of the two annual bonuses earned in the two fiscal
years immediately preceding a change in control (such bonus
payment prorated for the portion of the fiscal year preceding
the termination date),
•
a payment equal to 2.5 times (in the case of
Messrs. Siegel, Talbott and Patterson) or 1.5 times
(in the case of Messrs. Berns, Nelson and Vollmer) of the
sum of (i) the highest annual salary in effect for such
Employee and (ii) the average of the three annual bonuses
earned by the Employee for the three fiscal years preceding
the termination date, and
•
continued coverage under the Company’s
welfare plans for up to three years (in the case of
Messrs. Siegel, Talbott and Patterson) or two years (in the
case of Messrs. Berns, Nelson and Vollmer).
•
an acquisition by any individual, entity or group
of beneficial ownership of 35% or more of either the
Company’s then outstanding common stock or the combined
voting power of the then outstanding voting securities of the
Company entitled to vote in the election of directors,
•
a change occurs in which the members of the Board
of Directors as of the date of the Agreement cease to constitute
at least a majority of the Company’s Board of Directors
unless that change occurs through a vote of at least a majority
of the incumbent members of the Board of Directors, or
•
a change in the beneficial ownership of the
Company following consummation of a reorganization, merger,
consolidation, sale of the Company or any subsidiary of the
Company or a disposition of all or substantially all of the
assets of the Company in which the beneficial owners immediately
prior to the transaction own 65% or less of outstanding common
stock of the newly combined or merged entity.
•
the Employee’s death, disability or
retirement,
•
the termination of the Employee’s
employment, or
•
three years from the date the Agreement was
signed although, unless otherwise terminated, the Agreements
will automatically renew for successive twelve-month periods
unless the Company notifies the Employee at least 90 days
before the expiration of the initial term or the renewal period,
as applicable, that the term will not be extended.
Item 12.
Security Ownership of Certain Beneficial
Owners and Management and Related Stockholder
Matters.
Equity Compensation Plan Information
Number of
Securities
Number of
Remaining Available
Securities to Be
for Future Issuance
Issued upon
Weighted-Average
Under Equity
Exercise of
Exercise Price of
Compensation Plans
Outstanding
Outstanding
(Excluding
Options, Warrants
Options, Warrants
Securities Reflected
Plan Category
and Rights
and Rights
in Column a))
(a)
(b)
(c)
5,279,021
$
20.82
2,242,037
858,737
$
19.39
25,694
6,137,758
$
20.62
2,267,731
(1)
The Patterson-UTI Energy, Inc. 2001 Long-Term
Incentive Plan was approved by the Company’s Board of
Directors in July 2001. The terms of the Plan provide for grants
of stock options to eligible employees other than officers and
directors of the Company. The total number of stock options that
could be granted under the Plan was 1,000,000. No Incentive
Stock Options may be awarded under the Plan. All options are
granted with an exercise price equal to or greater than the fair
market value of the Company’s common stock at the time of
grant. The vesting schedule and term are set by the Compensation
Committee of the Board of Directors.
Also in July 2001, the Company’s Board of
Directors approved option grants, not included in any of the
Company’s stock option plans, for two non-employee
directors, each covering options to
purchase 12,000 shares of the Company’s common
stock at an exercise price greater than the fair market value of
the Company’s common stock on the grant date. The options
vested in November 2001 and expire in November 2005.
Name of
Amount and Nature of
Percent
Beneficial Owner
Beneficial Ownership
of Class
4,625,340
5.6%
4,292,600
5.2%
4,029,523
(1)
4.8%
678,565
(2)
*
461,573
(3)
*
295,000
(4)
*
46,386
(5)
*
33,940
(6)
*
24,000
(7)
*
35,000
(8)
*
49,000
(9)
*
172,600
(10)
*
318,084
(11)
*
6,143,671
(12)
7.2%
*
indicates less than 1.0%
(1)
Mr. Siegel is the President and sole stockholder
of REMY Investors, which is the general partner of REMY Capital
Partners III, L.P. (“REMY Capital”). The common stock
beneficially owned by Mr. Siegel includes 3,294,524 shares of
common stock owned by REMY Capital. The common stock
beneficially owned by Mr. Siegel also includes stock options
held by Mr. Siegel, which are presently exercisable or
become exercisable within sixty days, to
purchase 514,999 shares of common stock, but does not
include 370,001 shares underlying stock options held by
Mr. Siegel that are not presently exercisable and will not
become exercisable within sixty days.
(2)
Includes shares underlying stock options held by
Mr. Talbott, which are presently exercisable or become
exercisable within sixty days, to
purchase 469,999 shares. Does not include shares
underlying stock options held by Mr. Talbott to
purchase 370,001 shares each that are not presently
exercisable and will not become exercisable within sixty days.
(3)
Includes shares underlying stock options held by
Mr. Patterson, which are presently exercisable or become
exercisable within sixty days, to
purchase 378,999 shares. Does not include shares
underlying stock options held by Mr. Patterson to
purchase 370,001 shares each that are not presently
exercisable and will not become exercisable within sixty days.
(4)
Includes shares underlying stock options owned by
Mr. Berns, which are presently exercisable or become
exercisable within sixty days, to
purchase 275,000 shares. Does not include
185,000 shares underlying stock options that are not
presently exercisable and will not become exercisable within
sixty days and does not include shares of common stock
beneficially owned by REMY Investors by whom
Mr. Berns is employed. Mr. Berns
disclaims beneficial ownership of such shares beneficially owned
by REMY Investors.
(5)
Includes shares underlying presently exercisable
stock options held by Mr. Gist to
purchase 23,000 shares. Does not include
10,000 shares underlying stock options held by
Mr. Gist that are not presently exercisable and will not
become exercisable within sixty days.
(6)
Includes shares underlying presently exercisable
stock options held by Mr. Huff to
purchase 30,000 shares. Does not include
10,000 shares underlying stock options held by
Mr. Huff that are not presently exercisable and will not
become exercisable within sixty days.
(7)
Includes shares underlying presently exercisable
stock options held by Mr. Hunt to
purchase 20,000 shares.
(8)
Includes shares underlying presently exercisable
stock options held by Mr. Peak to
purchase 35,000 shares. Does not include
10,000 shares underlying stock options held by
Mr. Peak that are not presently exercisable and will not
become exercisable within sixty days.
(9)
Includes shares underlying presently exercisable
stock options held by Ms. Smith to
purchase 30,000 shares. Does not include
10,000 shares underlying stock options held by
Ms. Smith that are not presently exercisable and will not
become exercisable within sixty days.
(10)
Includes shares underlying stock options owned by
Mr. Nelson, which are presently exercisable or become
exercisable within sixty days, to
purchase 172,500 shares. Does not include
185,000 shares underlying stock options held by
Mr. Nelson that are not presently exercisable and will not
become exercisable within sixty days.
(11)
Includes shares underlying stock options owned by
Mr. Vollmer, which are presently exercisable or become
exercisable within sixty days, to
purchase 318,084 shares. Does not include
181,916 shares underlying stock options held by
Mr. Vollmer that are not presently exercisable and will not
become exercisable within sixty days.
(12)
Includes shares underlying stock options, which
are presently exercisable or become exercisable within sixty
days, to purchase 2,267,581 shares of common stock.
Does not include shares underlying stock options to
purchase 1,701,919 shares owned by such individuals
that are not presently exercisable and will not become
exercisable within sixty days.
Item 13.
Certain Relationships and Related
Transactions.
Year Ended
December 31, 2003
Joint
Production
Interest
Name
Revenues(1)
Costs(2)
$
185,180
$
85,244
73,424
27,514
2,633
3,467
8,802
2,531
2,880
1,066
737,445
503,017
240,921
129,290
9,558,279
6,829,996
—
1,177
10,809,564
7,583,302
125,283
45,942
—
1,181
8,423
3,348
8,423
3,348
142,129
53,819
151,912
265,355
$
11,103,605
$
7,902,476
(1)
Revenues for production of oil and natural gas,
net of state severance taxes.
(2)
Includes leasehold costs, tangible equipment
costs, intangible drilling costs, and lease operating expense
billed during that period. All joint interest costs have been
paid on a timely basis.
(3)
Anita Talbott is the wife of Cloyce A.
Talbott. Stan Talbott, Lisa Beck, and Stacy Talbott are
Mr. Talbott’s adult children. Steve Talbott is the
deceased son of Mr. Talbott. John Evan Talbott is
Mr. Talbott’s grandson.
(4)
SSI Oil & Gas, Inc. is beneficially
owned 50% by Cloyce A. Talbott and directly owned 50% by
A. Glenn Patterson.
(5)
IDC Enterprises, Ltd. is 50% owned by Cloyce A.
Talbott and 50% owned by A. Glenn Patterson.
(6)
SSSL, Ltd. is a limited partnership in which
children and grandchildren of Mr. Talbott are beneficiaries
and Mr. Talbott is the general partner.
(7)
Robert and Thomas M. Patterson are A. Glenn
Patterson’s adult children. The Glenn Patterson Family
Limited Partnership is a partnership in which each of
Mr. Patterson’s children shares equally and
Mr. Patterson is the manager.
(8)
Revenues included in IDC Enterprises, Ltd.
revenues.
Item 14.
Principal Accountant Fees and
Services.
Fees Incurred in
Fees Incurred in
Fiscal Year 2003
Fiscal Year 2002
$
323,000
$
331,000
180,000
73,000
81,000
285,000
31,000
98,000
$
615,000
$
787,000
Item 15.
Exhibits, Financial Statement Schedules and
Reports on Form 8-K.
See Index to Consolidated Financial Statements on
page F-1 of the Form 10-K.
Schedule II — Valuation and
qualifying accounts is filed with the Form 10-K on
page S-1.
2.1
Agreement and Plan of Merger, dated as of
May 26, 2003, by and among Patterson-UTI Energy, Inc.,
Patterson-UTI Acquisition, LLC and TMBR/ Sharp Drilling, Inc.(1)
2.2
Amendment No. 1 to Agreement and Plan of
Merger, dated as of December 30, 2003, by and among
Patterson-UTI Energy, Inc., Patterson-UTI Acquisition, LLC and
TMBR/ Sharp Drilling, Inc.(2)
3.1
Restated Certificate of Incorporation, as
amended.(3)
3.2
Amended and Restated Bylaws.(4)
4.1
Rights Agreement dated January 2, 1997,
between Patterson Energy, Inc. and Continental Stock
Transfer & Trust Company.(5)
4.2
Amendment to Rights Agreement dated as of
October 23, 2001.(6)
4.3
Restated Certificate of Incorporation, as amended
(See Exhibit 3.1)
4.4
Registration Rights Agreement with Bear, Stearns
and Co. Inc., dated March 25, 1994, as assigned by REMY
Capital Partners III, L.P.(4)
4.5
Patterson-UTI Energy, Inc. 1993 Stock Incentive
Plan, as amended.(7)†
4.6
Patterson-UTI Energy, Inc. Non-Employee
Directors’ Stock Option Plan, as amended.(8)†
4.7
Amended and Restated Patterson-UTI Energy, Inc.
2001 Long-Term Incentive Plan.(9)†
4.8
Patterson-UTI Energy, Inc. Amended and Restated
1997 Long-Term Incentive Plan.(3)†
4.9
Amended and Restated Patterson-UTI Energy, Inc.
Non-Employee Director Stock Option Plan.(3)†
4.10
Amended and Restated Patterson-UTI Energy, Inc.
1996 Employee Stock Option Plan.(10)†
4.11
1997 Stock Option Plan of DSI Industries,
Inc.(11)†
4.12
Stock Option Agreement dated July 20, 2001
between Patterson-UTI Energy, Inc. and Kenneth R. Peak (a
non-employee director of Patterson-UTI Energy, Inc.).(4)†
10.1
For additional material contracts, see
Exhibits 4.1, 4.2 and 4.4 through 4.11.
10.2
Patterson-UTI Energy, Inc. Change in Control
Agreement, effective as of January 29, 2004, by and between
Patterson-UTI Energy, Inc. and Mark S. Siegel.†*
10.3
Patterson-UTI Energy, Inc. Change in Control
Agreement, effective as of January 29, 2004, by and between
Patterson-UTI Energy, Inc. and A. Glenn Patterson.†*
10.4
Patterson-UTI Energy, Inc. Change in Control
Agreement, effective as of January 29, 2004, by and between
Patterson-UTI Energy, Inc. and Cloyce A. Talbott.†*
10.5
Patterson-UTI Energy, Inc. Change in Control
Agreement, effective as of January 29, 2004, by and between
Patterson-UTI Energy, Inc. and Kenneth N. Berns.†*
10.6
Patterson-UTI Energy, Inc. Change in Control
Agreement, effective as of January 29, 2004, by and between
Patterson-UTI Energy, Inc. and Jonathan D. Nelson.†*
10.7
Patterson-UTI Energy, Inc. Change in Control
Agreement, effective as of January 29, 2004, by and between
Patterson-UTI Energy, Inc. and John E. Vollmer III.†*
10.8
Model Form Operating Agreement.(12)
10.9
Form of Drilling Bid Proposal and Footage
Drilling Contract.(12)
10.10
Form of Turnkey Drilling Agreement.(12)
10.11
Form of Indemnification Agreement entered into by
Patterson-UTI Energy, Inc. with each of Mark S. Siegel, Cloyce
A. Talbott, A. Glenn Patterson, Kenneth N. Berns, Robert C.
Gist, Curtis W. Huff, Terry H. Hunt, Kenneth R. Peak, Nadine C.
Smith, Jonathan D. Nelson and John E. Vollmer III.†**
14.1
Patterson-UTI Energy, Inc. Code of Business
Conduct and Ethics for Senior Financial Executives.*
21.1
Subsidiaries of the Registrant.*
23.1
Consent of Independent Accountants —
PricewaterhouseCoopers LLP.*
23.2
Consent of Independent Petroleum
Engineer — M. Brian Wallace, P.E.*
31.1
Certification of Chief Executive Officer pursuant
to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act
of 1934, as amended.***
31.2
Certification of Chief Financial Officer pursuant
to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act
of 1934, as amended.***
32.1
Certification of Chief Executive Officer and
Chief Financial Officer pursuant to 18 USC
Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.***
(1)
Incorporated herein by reference to
Exhibit 2.1 to Form 8-K of TMBR/ Sharp Drilling, Inc.
filed on May 27, 2003.
(2)
Incorporated herein by reference to
Exhibit 2.1 to Form 8-K filed on December 31,
2003.
(3)
Incorporated herein by reference to Item 6,
“Exhibits and Reports on Form 8-K” to
Form 10-Q for the quarterly period ended June 30,
2003, filed on July 28, 2003.
(4)
Incorporated herein by reference to Item 14,
“Exhibits, Financial Statement Schedules and Reports on
Form 8-K” to Annual Report on Form 10-K for the
fiscal year ended December 31, 2001, filed on
March 19, 2002.
(5)
Incorporated herein by reference to Item 2,
“Exhibits” to Registration Statement on Form 8-A
filed on January 14, 1997.
(6)
Incorporated herein by reference to Item 6,
“Exhibits and Reports on Form 8-K” to
Form 10-Q for the quarterly period ended September 30,
2001, filed on October 31, 2001.
(7)
Incorporated herein by reference to Item 8,
“Exhibits” to Registration Statement on Form S-8
(File No. 333-47917) filed on March 13, 1998.
(8)
Incorporated herein by reference to Item 8,
“Exhibits” to Registration Statement on Form S-8
(File No. 333-39471) filed on November 4, 1997.
(9)
Incorporated herein by reference to Item 8,
“Exhibits” to Post-Effective Amendment No. 1 to
Registration Statement on Form S-8 (File
No. 333-60470) filed on November 27, 2002.
(10)
Incorporated herein by reference to Item 8,
“Exhibits” to Post-Effective Amendment No. 1 to
Registration Statement on Form S-8 (File
No. 333-60466) filed on July 25, 2001.
(11)
Incorporated herein by reference to Item 8,
“Exhibits” to Post-Effective Amendment No. 1 to
Registration Statement on Form S-8 (File
No. 333-60470) filed on July 25, 2001.
(12)
Incorporated herein by reference to Item 27,
“Exhibits” to Registration Statement on Form SB-2
(File No. 33-68058-FW) filed on August 30, 1993.
†
Management Contract or Compensatory Plan
identified as required by Item 15(a)(3) of Form 10-K.
*
Filed as an exhibit to the Form 10-K for the
year ended December 31, 2003, filed on February 4,
2004.
**
Filed herewith.
***
Filed as an exhibit to the Form 10-K for the year
ended December 31, 2003, filed on February 4, 2004 and
filed herewith.
SIGNATURES
Pursuant to the requirements of Section 13
or 15(d) of the Securities Exchange Act of 1934, the registrant
has duly caused this amendment to be signed on its behalf by the
undersigned, thereunto duly authorized this 28th day of April,
2004.
Date: April 28, 2004
PATTERSON-UTI ENERGY, INC.
By:
/s/ CLOYCE A. TALBOTT
Cloyce A. Talbott
Chief Executive Officer
15
EXHIBIT 10.11
PATTERSON-UTI ENERGY, INC.
FORM OF INDEMNIFICATION AGREEMENT
This Indemnification Agreement (“Agreement”) is entered into as of [Date] by and between Patterson-UTI Energy, Inc., a Delaware corporation (the “Company”) and [name] (“Indemnitee”).
RECITALS
A. The Company and Indemnitee recognize the significant increases in the cost of liability insurance for its directors, officers, employees, agents and fiduciaries.
B. The Company and Indemnitee further recognize the substantial increase in corporate litigation in general, subjecting directors, officers, employees, agents and fiduciaries to expensive litigation risks at the same time as the availability and coverage of liability insurance has been severely limited.
C. Indemnitee does not regard the current protection available as adequate under the present circumstances, and Indemnitee and other directors, officers, employees, agents and fiduciaries of the Company may not be willing to continue to serve in such capacities without additional protection.
D. The Company desires to attract and retain the services of highly qualified individuals, such as Indemnitee, to serve the Company and, in part, in order to induce Indemnitee to continue to provide services to the Company, wishes to provide for the indemnification and advancing of expenses to Indemnitee to the maximum extent permitted by law.
E. In view of the considerations set forth above, the Company desires that Indemnitee be indemnified by the Company as set forth herein.
NOW, THEREFORE, the Company and Indemnitee hereby agree as follows:
1. Indemnification.
(a) Indemnification of Expenses. The Company shall indemnify Indemnitee to the fullest extent permitted by law if Indemnitee was or is or becomes a party to or witness or other participant in, or is threatened to be made a party to or witness or other participant in, any threatened, pending or completed action, suit, proceeding or alternative dispute resolution mechanism, or any hearing, inquiry or investigation that Indemnitee in good faith believes might lead to the institution of any such action, suit, proceeding or alternative dispute resolution mechanism, whether civil, criminal, administrative, investigative or other (hereinafter a “Claim”) by reason of (or arising in part out of) any event or occurrence related to the fact that Indemnitee is or was a director, officer, employee, agent or fiduciary
of the Company or manager, officer, employee, agent or fiduciary any subsidiary of the Company, or is or was serving at the request of the Company as a director, manager, officer, employee, agent or fiduciary of another corporation, limited liability company, partnership, limited partnership, joint venture, trust or other enterprise, or by reason of any action or inaction on the part of Indemnitee while serving in such capacity (hereinafter an “Indemnifiable Event”) against any and all expenses (including attorneys’ fees and all other costs, expenses and obligations incurred in connection with investigating, defending, asserting a counterclaim in (if such counterclaim is approved in advance by the Company), being a witness in or participating in (including on appeal), or preparing to defend, assert a counterclaim in (if such counterclaim is approved in advance by the Company), be a witness in or participate in, any such action, suit, proceeding, alternative dispute resolution mechanism, hearing, inquiry or investigation), judgments, fines, penalties and amounts paid in settlement (if such settlement is approved in advance by the Company, which approval shall not be unreasonably withheld) of such Claim, and any federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments from the Company under this Agreement or as a result of the merger of UTI Energy Corp. with the Company (collectively, hereinafter “Expenses”), including all interest, assessments and other charges paid or payable in connection with or in respect of such Expenses. Such payment of Expenses shall be made by the Company as soon as practicable but in any event no later than five days after written demand by Indemnitee therefor is presented to the Company.
(b) Reviewing Party. Notwithstanding the foregoing, (i) the obligations of the Company under Section 1(a) shall be subject to the condition that the Reviewing Party (as described in Section 10(e) hereof) shall not have determined (in a written opinion, in any case in which the Independent Legal Counsel referred to in Section 1(c) hereof is involved) that Indemnitee would not be permitted to be indemnified under applicable law, and (ii) the obligation of the Company to make an advance payment of Expenses to Indemnitee pursuant to Section 2(a) (an “Expense Advance”) shall be subject to the condition that, if, when and to the extent that the Reviewing Party determines that Indemnitee would not be permitted to be so indemnified under applicable law, the Company shall be entitled to be reimbursed by Indemnitee (who hereby agrees to reimburse the Company) for all such amounts theretofore paid; provided, however, that if Indemnitee has commenced or thereafter commences legal proceedings in a court of competent jurisdiction to secure a determination that Indemnitee should be indemnified under applicable law, any determination made by the Reviewing Party that Indemnitee would not be permitted to be indemnified under applicable law shall not be binding and Indemnitee shall not be required to reimburse the Company for any Expense Advance until a final judicial determination is made with respect thereto (as to which all rights of appeal therefrom have been exhausted or lapsed). Indemnitees’ obligation to reimburse the Company for any Expense Advance shall be unsecured and no interest shall be charged thereon. If there has not been a Change in Control (as defined in Section 10(c) hereof), the Reviewing Party shall be selected by the Board of Directors, and if there has been such a Change in Control (other than a Change in Control which has been approved by a majority of the Company’s Board of Directors who were directors immediately prior to such Change in Control), the Reviewing Party shall be the Independent Legal Counsel referred to in Section 1(c) hereof. If there has been no determination by the Reviewing Party or if the Reviewing Party determines that Indemnitee substantively would not be permitted to be indemnified in whole or in part under applicable law, Indemnitee shall have the right to commence litigation seeking a determination by the court or challenging any such determination by the Reviewing Party or any aspect thereof, including the legal or
-2-
factual bases therefor, and the Company hereby consents to service of process and to appear in any such proceeding. Any determination by the Reviewing Party otherwise shall be conclusive and binding on the Company and Indemnitee.
(c) Change in Control. The Company agrees that if there is a Change in Control of the Company (other than a Change in Control which has been approved by a majority of the Company’s Board of Directors who were directors immediately prior to such Change in Control) then, with respect to all matters thereafter arising concerning the rights of Indemnitees to payments of Expenses and Expense Advances under this Agreement or any other agreement, under the Company’s Certificate of Incorporation or Bylaws as now or hereafter in effect, Independent Legal Counsel (as defined in Section 10(d) hereof) shall be selected by Indemnitee and approved by the Company (which approval shall not be unreasonably withheld). Such counsel, among other things, shall render its written opinion to the Company and Indemnitee as to whether and to what extent Indemnitee would be permitted to be indemnified under applicable law and the Company agrees to abide by such opinion. The Company agrees to pay the reasonable fees of the Independent Legal Counsel referred to above and to fully indemnify such counsel against any and all expenses (including attorneys’ fees), claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.
(d) Establishment of Trust. In the event of a Change in Control (other than a Change in Control which has been approved by a majority of the Company’s Board of Directors who were directors immediately prior to such Change in Control) the Company shall, upon written request by Indemnitee, create a trust for the benefit of the Indemnitee and from time to time upon written request of Indemnitee shall fund the trust in an amount sufficient to satisfy any and all expenses reasonably anticipated at the time of each such request to be incurred in connection with investigating, preparing for, participating in, and/or defending any proceeding relating to any Indemnifiable Event covered herein. The amount or amounts to be deposited in the trust pursuant to the foregoing funding obligation shall be determined by the Independent Legal Counsel. The terms of the trust shall provide that (i) the trust shall not be revoked or the principal thereof invaded without the written consent of the Indemnitee, (ii) the trustee shall advance, within five days of a request by the Indemnitee, any and all expenses to the Indemnitee (and the Indemnitee hereby agrees to reimburse the trust under the same circumstances for which the Indemnitee agreed to reimburse the Company under Section 1(b) of this Agreement), (iii) the trust shall continue to be funded by the Company in accordance with the funding obligation set forth above, (iv) the trustee shall promptly pay to the Indemnitee all amounts for which the Indemnitee shall be entitled to indemnification pursuant to this Agreement or otherwise, and (v) all unexpended funds in the trust shall revert to the Company upon a final determination by the Independent Legal Counsel or a court of competent jurisdiction, as the case may be, that the Indemnitee has been fully indemnified under the terms of this Agreement. The trustee shall be chosen by the Indemnitee. Nothing in this Section 1(d) shall relieve the Company of any of its obligations under this Agreement. All income earned on the assets held in the trust shall be reported as income by the Company for federal, state, local, and foreign tax purposes. The Company shall pay all costs of establishing and maintaining the trust and shall indemnify the trustee against any and all expenses (including attorneys’ fees), claims, liabilities, loss, and damages arising out of or relating to this Agreement or the establishment and maintenance of the trust.
-3-
(e) Mandatory Payment of Expenses. Notwithstanding any other provision of this Agreement other than Section 8 hereof, to the extent that Indemnitee has been successful on the merits or otherwise, including, without limitation, the dismissal of an action without prejudice, in defense of any action, assertion of a counterclaim (if such counterclaim was approved in advance by the Company), suit, proceeding, inquiry or investigation referred to in Section (1)(a) hereof or in the defense of any claim, assertion of a counterclaim (if such counterclaim was approved in advance by the Company), issue or matter therein, Indemnitee shall be indemnified against all Expenses incurred by Indemnitee in connection therewith.
2. Expenses; Indemnification Procedure.
(a) Advancement of Expenses. The Company shall advance all Expenses incurred by Indemnitee. The advances to be made hereunder shall be paid by the Company to Indemnitee as soon as practicable but in any event no later than five days after written demand by Indemnitee therefor to the Company.
(b) Notice/Cooperation by Indemnitee. Indemnitee shall, as a condition precedent to Indemnitees’ right to be indemnified under this Agreement, give the Company notice in writing as soon as practicable of any Claim made against Indemnitee for which indemnification will or could be sought under this Agreement. Notice to the Company shall be directed to the Chief Executive Officer of the Company at the address shown on the signature page of this Agreement (or such other address as the Company shall designate in writing to Indemnitee). In addition, Indemnitee shall give the Company such information and cooperation as it may reasonably require and as shall be within Indemnitees’ power.
(c) No Presumptions; Burden of Proof. For purposes of this Agreement, the termination of any Claim by judgment, order, settlement (whether with or without court approval) or conviction, or upon a plea of nolo contendere, or its equivalent, shall not create a presumption that Indemnitee did not meet any particular standard of conduct or have any particular belief or that a court has determined that indemnification is not permitted by applicable law. In addition, neither the failure of the Reviewing Party to have made a determination as to whether Indemnitee has met any particular standard of conduct or had any particular belief, nor an actual determination by the Reviewing Party that Indemnitee has not met such standard of conduct or did not have such belief, prior to the commencement of legal proceedings by Indemnitee to secure a judicial determination that Indemnitee should be indemnified under applicable law, shall be a defense to Indemnitee’s claim or create a presumption that Indemnitee has not met any particular standard of conduct or did not have any particular belief. In connection with any determination by the Reviewing Party or otherwise as to whether Indemnitee is entitled to be indemnified hereunder, the burden of proof shall be on the Company to establish that Indemnitee is not so entitled. The knowledge and/or actions, or failure to act, of any director, manager, officer, agent or employee of the Company or of any subsidiary of the Company shall not be imputed to Indemnitee for purposes of determining the right of indemnification under this Agreement.
(d) Notice to Insurers. If, at the time of the receipt by the Company of a notice of a Claim pursuant to Section 2(b) hereof, the Company has liability insurance in effect which may cover such Claim, the Company shall give prompt notice of the commencement of such Claim to the insurers in
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accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of Indemnitee, all amounts payable as a result of such action, suit, proceeding, inquiry or investigation in accordance with the terms of such policies.
(e) Selection of Counsel. In the event the Company shall be obligated hereunder to pay the Expenses of any Claim, the Company shall be entitled to assume the defense of such Claim with counsel approved by Indemnitee, which approval shall not be unreasonably withheld, upon the delivery to Indemnitee of written notice of its election so to do. After delivery of such notice, approval of such counsel by Indemnitee and the retention of such counsel by the Company, the Company will not be liable to Indemnitee under this Agreement for any fees of counsel subsequently incurred by Indemnitee with respect to the same Claim; provided that, (i) Indemnitee shall have the right to employ Indemnitees’ counsel in any such Claim at Indemnitee expense and (ii) if (A) the employment of counsel by Indemnitee has been previously authorized by the Company, (B) Indemnitee shall have reasonably concluded that there is a conflict of interest between the Company and Indemnitee in the conduct of any such defense, or (C) the Company shall not continue to retain such counsel to defend such Claim, then the fees and expenses of Indemnitee’s counsel shall be at the expense of the Company. The Company shall have the right to conduct such defense as it sees fit in its sole discretion, including the right to settle any claim against Indemnitee without the consent of the Indemnitee.
3. Additional Indemnification Rights; Nonexclusivity.
(a) Scope. The Company hereby agrees to indemnify Indemnitee to the fullest extent permitted by law, notwithstanding that such indemnification is not specifically authorized by the other provisions of this Agreement, the Company’s Certificate of Incorporation, the Company’s Bylaws or by statute. In the event of any change after the date of this Agreement in any applicable law, statute or rule which expands the right of a Delaware corporation to indemnify a member of its Board of Directors, or an officer, employee, agent or fiduciary, as the case may be, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits afforded by such change. In the event of any change in any applicable law, statute or rule which narrows the right of a Delaware corporation to indemnify a member of its Board of Directors or an officer, employee, agent or fiduciary, as the case may be, such change, to the extent not otherwise required by such law, statute or rule to be applied to this Agreement, shall have no effect on this Agreement or the parties’ rights and obligations hereunder except as set forth in Section 8(a) hereof.
(b) Nonexclusivity. The indemnification provided by this Agreement shall be in addition to any rights to which Indemnitee may be entitled under the Company’s Certificate of Incorporation, its Bylaws, the charter documents of any subsidiary of the Company, any agreement, any vote of stockholders or disinterested directors, the law of the State of Delaware, or otherwise. The indemnification provided under this Agreement shall continue as to Indemnitee for any action Indemnitee took or did not take while serving in an indemnified capacity even though Indemnitee may have ceased to serve in such capacity.
4. No Duplication of Payments. The Company shall not be liable under this Agreement to make
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any payment in connection with any Claim made against Indemnitee to the extent Indemnitee has otherwise actually received payment (under any insurance policy, Certificate of Incorporation, Bylaw or otherwise) of the amounts otherwise indemnifiable hereunder.
5. Partial Indemnification. If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of Expenses incurred in connection with any Claim, but not, however, for all of the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion of such Expenses to which Indemnitee are entitled.
6. Mutual Acknowledgement. Both the Company and Indemnitee acknowledge that in certain instances, Federal law or applicable public policy may prohibit the Company from indemnifying its directors, officers, employees, agents or fiduciaries under this Agreement or otherwise. Indemnitee understands and acknowledges that the Company has undertaken or may be required in the future to undertake with the Securities and Exchange Commission to submit the question of indemnification to a court in certain circumstances for a determination of the Company’s right under public policy to indemnify Indemnitee.
7. Liability Insurance. To the extent the Company maintains liability insurance applicable to directors, officers, employees, agents or fiduciaries, Indemnitee shall be covered by such policies in such a manner as to provide Indemnitee the same rights and benefits as are accorded to the most favorably insured of the Company’s directors, if Indemnitee is a director; or of the Company’s officers, if Indemnitee is not a director of the Company but is an officer; or of the key employees, agents or fiduciaries of the Company, if Indemnitee is not an officer or director but is a key employee, agent or fiduciary.
8. Exceptions. Any other provision herein to the contrary notwithstanding, the Company shall not be obligated pursuant to the terms of this Agreement:
(a) Excluded Action or Omissions. To indemnify Indemnitee for Indemnitee’s acts, omissions or transactions from which Indemnitee or the Indemnitee may not be indemnified under applicable law;
(b) Claims Initiated by Indemnitee. To indemnify or advance expenses to Indemnitee with respect to Claims initiated or brought voluntarily by Indemnitee and not by way of defense, except (i) with respect to actions or proceedings brought to establish or enforce a right to indemnification under this Agreement or any other agreement or insurance policy or under the Company’s Certificate of Incorporation or Bylaws now or hereafter in effect relating to Claims for Indemnifiable Events, (ii) in specific cases if the Board of Directors has approved the initiation or bringing of such Claim, or (iii) as otherwise required under Section 145 of the Delaware General Corporation Law, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advance expense payment or insurance recovery, as the case may be;
(c) Lack of Good Faith. To indemnify Indemnitee for any expenses incurred by Indemnitee with respect to any proceeding instituted by Indemnitee to enforce or interpret this Agreement, if a court of competent jurisdiction determines that each of the material assertions made by Indemnitee in such proceeding was not made in good faith or was frivolous; or
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(d) Claims Under Section 16(b). To indemnify Indemnitee for the payment of profits arising from the purchase and sale by Indemnitee of securities in violation of Section 16(b) of the Securities Exchange Act of 1934, as amended, or any similar successor statute.
9. Period of Limitations. No legal action shall be brought and no cause of action shall be asserted by or in the right of the Company against Indemnitee, Indemnitee’s estate, spouse, heirs, executors or personal or legal representatives after the expiration of two years from the date of accrual of such cause of action, and any claim or cause of action of the Company shall be extinguished and deemed released unless asserted by the timely filing of a legal action within such two-year period; provided, however, that if any shorter period of limitations is otherwise applicable to any such cause of action, such shorter period shall govern.
10. Construction of Certain Phrases.
(a) For purposes of this Agreement, references to the “Company” shall include, in addition to the resulting corporation, any constituent corporation or other entity (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, managers, partners, officers, employees, agents or fiduciaries, so that if Indemnitee is or was a director, manager, partner officer, employee, agent or fiduciary of such constituent corporation or other entity, or is or was serving at the request of such constituent corporation or other entity as a director, manager, partner officer, employee, agent or fiduciary of another corporation, limited liability company, partnership, limited partnership, joint venture, employee benefit plan, trust or other enterprise, Indemnitee shall stand in the same position under the provisions of this Agreement with respect to the resulting or surviving corporation or other entity as Indemnitee would have with respect to such constituent corporation or other entity if its separate existence had continued.
(b) For purposes of this Agreement, references to “other enterprises” shall include employee benefit plans; references to “fines” shall include any excise taxes assessed on Indemnitee with respect to an employee benefit plan; and references to “serving at the request of the Company” shall include any service as a director, manager, partner, officer, employee, agent or fiduciary of the Company or any subsidiary of the Company which imposes duties on, or involves services by, such director, manager, partner, officer, employee, agent or fiduciary with respect to an employee benefit plan, its participants or its beneficiaries; and if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan, Indemnitee shall be deemed to have acted in a manner not opposed to the best interests of the Company.
(c) For purposes of this Agreement a “Change in Control” shall be deemed to have occurred if (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended), other than a trustee or other fiduciary holding securities under an employee benefit plan of the Company or a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company, (A) who is or
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becomes the beneficial owner, directly or indirectly, of securities of the Company representing 10% or more of the combined voting power of the Company’s then outstanding Voting Securities, increases his beneficial ownership of such securities by 5% or more over the percentage so owned by such person, or (B) becomes the “beneficial owner” (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Company representing more than 20% of the total voting power represented by the Company’s then outstanding Voting Securities, (ii) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board of Directors of the Company and any new director whose election by the Board of Directors or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof, or (iii) the stockholders of the Company approve a merger or consolidation of the Company with any other corporation other than a merger or consolidation which would result in the Voting Securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into Voting Securities of the surviving entity) at least 80% of the total voting power represented by the Voting Securities of the Company or such surviving entity outstanding immediately after such merger or consolidation, or the stockholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company (in one transaction or a series of transactions) of all or substantially all of the Company’s assets.
(d) For purposes of this Agreement, “Independent Legal Counsel” shall mean an attorney or firm of attorneys, selected in accordance with the provisions of Section 1(c) hereof, who shall not have otherwise performed services for the Company or Indemnitee within the last five years (other than with respect to matters concerning the rights of Indemnitee under this Agreement, or of other indemnitees under similar indemnity agreements).
(e) For purposes of this Agreement, a “Reviewing Party” shall mean any appropriate person or body consisting of a member or members of the Company’s Board of Directors or any other person or body appointed by the Board of Directors who is not a party to the particular Claim for which Indemnitee are seeking indemnification, or Independent Legal Counsel.
(f) For purposes of this Agreement, “Voting Securities” shall mean any securities of the Company that vote generally in the election of directors.
11. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall constitute an original.
12. Binding Effect; Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors, assigns, including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business and/or assets of the Company, spouses, heirs, and personal and legal representatives. The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all, or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to
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assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place. This Agreement shall continue in effect with respect to Claims relating to Indemnifiable Events regardless of whether Indemnitee continues to serve as a director, manager, partner, officer, employee, agent or fiduciary of the Company, any of its subsidiaries or of any other enterprise at the Company’s request.
13. Attorneys’ Fees. In the event that any action is instituted by Indemnitee under this Agreement or under any liability insurance policies maintained by the Company to enforce or interpret any of the terms hereof or thereof, Indemnitee shall be entitled to be paid all Expenses incurred by Indemnitee with respect to such action, regardless of whether Indemnitee is ultimately successful in such action, and shall be entitled to the advancement of Expenses with respect to such action, unless, as a part of such action, a court of competent jurisdiction over such action determines that each of the material assertions made by Indemnitee as a basis for such action was not made in good faith or was frivolous. In the event of an action instituted by or in the name of the Company under this Agreement to enforce or interpret any of the terms of this Agreement, Indemnitee shall be entitled to be paid all Expenses incurred by Indemnitee in defense of such action (including costs and expenses incurred with respect to Indemnitee counterclaims and cross-claims made in such action), and shall be entitled to the advancement of Expenses with respect to such action, unless, as a part of such action, a court having jurisdiction over such action determines that each of Indemnitee material defenses to such action was made in bad faith or was frivolous.
14. Notice. All notices and other communications required or permitted hereunder shall be in writing, shall be effective when given, and shall in any event be deemed to be given (a) five (5) days after deposit with the U.S. Postal Service or other applicable postal service, if delivered by first class mail, postage prepaid, (b) upon delivery, if delivered by hand, (c) one business day after the business day of deposit with Federal Express or similar overnight courier, freight prepaid, or (d) one day after the business day of delivery by facsimile transmission, if delivered by facsimile transmission, with copy by first class mail, postage prepaid, and shall be addressed if to Indemnitee, at the Indemnitee address as set forth beneath Indemnitee signatures to this Agreement and if to the Company at the address of its principal corporate offices (attention: Secretary) or at such other address as such party may designate by ten days’ advance written notice to the other party hereto.
15. Consent to Jurisdiction. The Company and Indemnitee each hereby irrevocably consent to the jurisdiction of the courts of the State of Delaware for all purposes in connection with any action or proceeding which arises out of or relates to this Agreement and agree that any action instituted under this Agreement shall be commenced, prosecuted and continued only in the Court of Chancery of the State of Delaware in and for New Castle County, which shall be the exclusive and only proper forum for adjudicating such a claim.
16. Severability. The provisions of this Agreement shall be severable in the event that any of the provisions hereof (including any provision within a single section, paragraph or sentence) are held by a court of competent jurisdiction to be invalid, void or otherwise unenforceable, and the remaining provisions shall remain enforceable to the fullest extent permitted by law. Furthermore, to the fullest extent possible, the provisions of this Agreement (including, without limitations, each portion of this
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Agreement containing any provision held to be invalid, void or otherwise unenforceable, that is not itself invalid, void or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable.
17. Choice of Law. This Agreement shall be governed by and its provisions construed and enforced in accordance with the laws of the State of Delaware, as applied to contracts between Delaware residents, entered into and to be performed entirely within the State of Delaware, without regard to the conflict of laws principles thereof.
18. Subrogation. In the event of payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee who shall execute all documents required and shall do all acts that may be necessary to secure such rights and to enable the Company effectively to bring suit to enforce such rights.
19. Amendment and Termination. No amendment, modification, termination or cancellation of this Agreement shall be effective unless it is in writing signed by both the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.
20. Integration and Entire Agreement. This Agreement sets forth the entire understanding between the parties hereto and supersedes and merges all previous written and oral negotiations, commitments, understandings and agreements relating to the subject matter hereof between the parties hereto.
21. No Construction as Employment Agreement. Nothing contained in this Agreement shall be construed as giving Indemnitee any right to be retained in the employ of the Company or any of its subsidiaries.
[signature page follows immediately hereafter]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.
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Exhibit 31.1
CERTIFICATIONS
I, Cloyce A. Talbott, certify that,
(1) I have reviewed this Amendment No. 1 to the annual report on Form 10-K/A
of Patterson-UTI Energy, Inc.;
(2) Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this report;
(3) Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects
the financial condition, results of operations and cash flows of the registrant
as of, and for, the periods presented in this report;
(4) The registrant’s other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
(a) designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision, to
ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
(b) evaluated the effectiveness of the registrant’s disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the
period covered by this report based on such evaluation; and
(c) disclosed in this report any change in the registrant’s internal
control over financial reporting that occurred during the registrant’s most
recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of
an annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over financial
reporting; and
(5) The registrant’s other certifying officers and I have disclosed, based
on our most recent evaluation of internal control over financial reporting, to
the registrant’s auditors and the audit committee of the registrant’s board of
directors (or persons performing the equivalent functions):
(a) all significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information; and
(b) any fraud, whether or not material, that involves management or
other employees who
have a significant role in the registrant’s internal control over
financial reporting.
/s/ CLOYCE A. TALBOTT
Cloyce A. Talbott
Chief Executive Officer
Exhibit 31.2
CERTIFICATIONS
I, Jonathan D. Nelson, certify that:
(1) I
have reviewed this Amendment No. 1 to the annual report on Form
10-K/A of Patterson-UTI Energy, Inc.;
(2) Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this report;
(3) Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects
the financial condition, results of operations and cash flows of the registrant
as of, and for, the periods presented in this report;
(4) The registrant’s other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
(a) designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision, to
ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
(b) evaluated the effectiveness of the registrant’s disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the
period covered by this report based on such evaluation; and
(c) disclosed in this report any change in the registrant’s internal
control over financial reporting that occurred during the registrant’s most
recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of
an annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over financial
reporting; and
(5) The registrant’s other certifying officers and I have disclosed, based
on our most recent evaluation of internal control over financial reporting, to
the registrant’s auditors and the audit committee of the registrant’s board of
directors (or persons performing the equivalent functions):
(a) all significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information; and
(b) any fraud, whether or not material, that involves management or
other employees who
have a significant role in the registrant’s internal control over
financial reporting.
/s/ JONATHAN D. NELSON
Jonathan D. Nelson
Vice President-Finance, Chief Financial Officer,
Secretary and Treasurer
Exhibit 32.1
CERTIFICATION PURSUANT TO
NOT FILED PURSUANT TO THE SECURITIES EXCHANGE ACT OF 1934
In connection with Amendment No. 1 to
the Annual Report of Patterson-UTI Energy, Inc. (the
“Company”) on Form 10-K/A for the period ending December 31, 2003, as filed with
the Securities and Exchange Commission on the date hereof (the “Report”),
Cloyce A. Talbott, Chief Executive Officer, and Jonathan D. Nelson, Chief
Financial Officer, of the Company, each certify, pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
that:
A signed original of this written statement required by Section 906 has been
provided to the Company and will be retained by the Company and furnished to
the Securities and Exchange Commission upon request.
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
(1)
The Report fully complies with the requirements of section
13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)
The information contained in the Report fairly presents, in
all material respects, the financial condition and results of
operations of the Company.
/s/ Cloyce A. Talbott
Cloyce A. Talbott
Chief Executive Officer
April 28, 2004
/s/ Jonathan D. Nelson
Jonathan D. Nelson
Chief Financial Officer
April 28, 2004