EXHIBIT 10.1
PATTERSON-UTI ENERGY, INC.
2005 LONG-TERM INCENTIVE PLAN
      Patterson-UTI Energy, Inc. (the “Company”), a Delaware corporation, hereby
establishes and adopts the following 2005 Long-Term Incentive Plan (the “Plan”).
1. Purpose of the Plan
      The purpose of the Plan is to assist the Company and its Subsidiaries in
attracting and retaining selected individuals to serve as directors, employees,
consultants and/or advisors of the Company who are expected to contribute to the
Company’s success and to achieve long-term objectives which will inure to the
benefit of all stockholders of the Company through the additional incentives
inherent in the Awards hereunder.
2. Definitions
      2.1. “Award” shall mean any Option, Stock Appreciation Right, Restricted
Stock Award, Performance Award, Other Stock Unit Award or any other right,
interest or option relating to Shares or other property (including cash) granted
pursuant to the provisions of the Plan.
      2.2. “Award Agreement” shall mean any written agreement, contract or other
instrument or document evidencing any Award granted by the Committee hereunder.
      2.3. “Board” shall mean the board of directors of the Company.
      2.4. “Code” shall mean the Internal Revenue Code of 1986, as amended from
time to time.
      2.5. “Committee” shall mean the Compensation Committee of the Board,
consisting of no fewer than two Directors, each of whom is (i) a “Non-Employee
Director” within the meaning of Rule 16b-3 of the Exchange Act, (ii) an “outside
director” within the meaning of Section 162(m) of the Code, and (iii) an
“independent director” for purpose of the rules and regulations of the NASDAQ
Stock Market.
      2.6. “Covered Employee” shall mean a “covered employee” within the meaning
of Section 162(m) of the Code.
      2.7. “Director” shall mean a non-employee member of the Board.
      2.8. “Dividend Equivalents” shall have the meaning set forth in Section
12.5.
      2.9. “Employee” shall mean any employee of the Company or any Subsidiary
and any prospective employee conditioned upon, and effective not earlier than,
such person’s becoming an employee of the Company or any Subsidiary. Solely for
purposes of the Plan, an Employee shall also mean any consultant or advisor who
provides services to the Company or any Subsidiary, so long as such person
(i) renders bona fide services that are not in connection with the offer and
sale of the Company’s securities in a capital-raising transaction and (ii) does
not directly or indirectly promote or maintain a market for the Company’s
securities.
      2.10. “Exchange Act” shall mean the Securities Exchange Act of 1934, as
amended.
      2.11. “Fair Market Value” shall mean, with respect to any property other
than Shares, the market value of such property determined by such methods or
procedures as shall be established from time to time by the Committee. The Fair
Market Value of Shares as of any date shall be the per Share closing price of
the Shares as reported on the NASDAQ Stock Market on that date (or if there were
no reported prices on such date, on the last preceding date on which the prices
were reported) or, if the Company is not then listed on the NASDAQ Stock Market,
on the principal national securities exchange on which the Company is listed,
and if the Company is not then listed on the NASDAQ Stock Market or any national
securities exchange, the Fair Market Value of Shares shall be determined by the
Committee in its sole discretion using appropriate criteria.

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      2.12. “Freestanding Stock Appreciation Right” shall have the meaning set
forth in Section 6.1.
      2.13. “Limitations” shall have the meaning set forth in Section 10.5.
      2.14. “Option” shall mean any right granted to a Participant under the
Plan allowing such Participant to purchase Shares at such price or prices and
during such period or periods as the Committee shall determine.
      2.15. “Other Stock Unit Award” shall have the meaning set forth in
Section 8.1.
      2.16. “Participant” shall mean an Employee or Director who is selected by
the Committee to receive an Award under the Plan.
      2.17. “Payee” shall have the meaning set forth in Section 13.1.
      2.18. “Performance Award” shall mean any Award of Performance Shares or
Performance Units granted pursuant to Article 9.
      2.19. “Performance Period” shall mean that period established by the
Committee at the time any Performance Award is granted or at any time thereafter
during which any performance goals specified by the Committee with respect to
such Award are to be measured.
      2.20. “Performance Share” shall mean any grant pursuant to Article 9 of a
unit valued by reference to a designated number of Shares, which value may be
paid to the Participant by delivery of such property as the Committee shall
determine, including cash, Shares, other property, or any combination thereof,
upon achievement of such performance goals during the Performance Period as the
Committee shall establish at the time of such grant or thereafter.
      2.21. “Performance Unit” shall mean any grant pursuant to Section 9 of a
unit valued by reference to a designated amount of property (including cash)
other than Shares, which value may be paid to the Participant by delivery of
such property as the Committee shall determine, including cash, Shares, other
property, or any combination thereof, upon achievement of such performance goals
during the Performance Period as the Committee shall establish at the time of
such grant or thereafter.
      2.22. “Permitted Assignee” shall have the meaning set forth in
Section 12.3.
      2.23. “Prior Plans” shall mean, collectively, the Company’s Amended and
Restated 1997 Long-Term Incentive Plan, Amended and Restated Non-Employee
Director Stock Option Plan, Non-Employee Directors Stock Option Plan, Amended
and Restated 1996 Employee Stock Option Plan, the Company’s Amended and Restated
2001 Long-Term Incentive Plan and the Company’s 1993 Stock Incentive Plan.
      2.24. “Restricted Stock” shall mean any Share issued with the restriction
that the holder may not sell, transfer, pledge or assign such Share and with
such other restrictions as the Committee, in its sole discretion, may impose
(including any restriction on the right to vote such Share and the right to
receive any dividends), which restrictions may lapse separately or in
combination at such time or times, in installments or otherwise, as the
Committee may deem appropriate.
      2.25. “Restriction Period” shall have the meaning set forth in
Section 7.1.
      2.26. “Restricted Stock Award” shall have the meaning set forth in
Section 7.1.
      2.27. “Shares” shall mean the shares of common stock of the Company, par
value $.01 per share.
      2.28. “Stock Appreciation Right” shall mean the right granted to a
Participant pursuant to Section 6.
      2.29. “Subsidiary” shall mean any corporation or other entity, whether
domestic or foreign, in which the Company has or obtains, directly or
indirectly, a proprietary interest of more than fifty percent (50%) by reason of
stock ownership or otherwise.
      2.30. “Substitute Awards” shall mean Awards granted or Shares issued by
the Company in assumption of, or in substitution or exchange for, awards
previously granted, or the right or obligation to make future

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awards, by a company acquired by the Company or any Subsidiary or with which the
Company or any Subsidiary combines.
      2.31. “Tandem Stock Appreciation Right” shall have the meaning set forth
in Section 6.1.
3. Shares Subject to the Plan
      3.1 Number of Shares. (a) Subject to adjustment as provided in
Section 12.2 and this Section 3.1, the total number of Shares authorized for
grant under the Plan shall be 6,250,000, reduced by the total number of Shares
subject to any options or awards granted under the Prior Plans during the period
commencing on January 1, 2005 and ending on the effective date of this Plan (the
“Pre-Effective Period”). Any Shares that are subject to Awards of Options or
Stock Appreciation Rights, whether granted under this Plan or a Prior Plan
during the Pre-Effective Period, shall be counted against this limit as one
(1) Share for every one (1) Share granted. Any Shares that are subject to Awards
other than Options or Stock Appreciation Rights, whether awarded under this Plan
or a Prior Plan during the Pre-Effective Period, shall be counted against this
limit as one and six tenths (1.6) Shares for every one (1) Share awarded. In
connection with the granting of a Performance Unit denominated in dollars, the
number of Shares that shall be counted against this limit shall 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.
      (b) If any Shares subject to an Award or to an award under the Prior Plans
are forfeited, expire or otherwise terminate without issuance of such Shares, or
any Award or award under the Prior Plans is settled for cash or otherwise does
not result in the issuance of all or a portion of the Shares subject to such
Award, the Shares shall, to the extent of such forfeiture, expiration,
termination, cash settlement or non-issuance, again be available for Awards
under the Plan, subject to Section 3.1(d) below. If any Shares 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 for income or
employment taxes, the Shares, shall not become available for grant under the
Plan.
      (c) Substitute Awards shall not reduce the Shares authorized for grant
under the Plan or authorized for grant to a Participant in any calendar year.
Additionally, in the event that a company acquired by the Company or any
Subsidiary or with which the Company or any Subsidiary combines has shares
available under a pre-existing plan approved by shareholders and not adopted in
contemplation of such acquisition or combination, the shares available for grant
pursuant to the terms of such pre-existing plan (as adjusted, to the extent
appropriate, using the exchange ratio or other adjustment or valuation ratio or
formula used in such acquisition or combination to determine the consideration
payable to the holders of common stock of the entities party to such acquisition
or combination) may be used for Awards under the Plan and shall not reduce the
Shares authorized for grant under the Plan; provided that Awards using such
available shares shall not be made after the date awards or grants could have
been made under the terms of the pre-existing plan, absent the acquisition or
combination, and shall only be made to individuals who were not Employees or
Directors prior to such acquisition or combination.
      (d) Any Shares that again become available for grant pursuant to this
Article shall be added back as one (1) Share if such Shares were subject to
Options or Stock Appreciation Rights granted under the Plan or options or stock
appreciation rights granted under the Prior Plans, and as one and six tenths
(1.6) Shares if such Shares were subject to Awards other than Options or Stock
Appreciation Rights granted under the Plan.
      3.2. Character of Shares. Any Shares issued hereunder may consist, in
whole or in part, of authorized and unissued shares, treasury shares or shares
purchased in the open market or otherwise.
4. Eligibility and Administration
      4.1. Eligibility. Any Employee or Director shall be eligible to be
selected as a Participant.
      4.2. Administration. (a) The Plan shall be administered by the Committee.
The Committee shall have full power and authority, subject to the provisions of
the Plan and subject to such orders or resolutions not inconsistent with the
provisions of the Plan as may from time to time be adopted by the Board, to:
(i) select

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the Employees and Directors to whom Awards may from time to time be granted
hereunder; (ii) determine the type or types of Awards, not inconsistent with the
provisions of the Plan, to be granted to each Participant hereunder;
(iii) determine the number of Shares to be covered by each Award granted
hereunder; (iv) determine the terms and conditions, not inconsistent with the
provisions of the Plan, of any Award granted hereunder; (v) determine whether,
to what extent and under what circumstances Awards may be settled in cash,
Shares or other property, subject to Section 8.1; (vi) determine whether, to
what extent, and under what circumstances cash, Shares, other property and other
amounts payable with respect to an Award made under the Plan shall be deferred
either automatically or at the election of the Participant; (vii) determine
whether, to what extent and under what circumstances any Award shall be canceled
or suspended; (viii) interpret and administer the Plan and any instrument or
agreement entered into under or in connection with the Plan, including any Award
Agreement; (ix) correct any defect, supply any omission or reconcile any
inconsistency in the Plan or any Award in the manner and to the extent that the
Committee shall deem desirable to carry it into effect; (x) establish such rules
and regulations and appoint such agents as it shall deem appropriate for the
proper administration of the Plan; (xi) determine whether any Award will have
Dividend Equivalents; and (xii) make any other determination and take any other
action that the Committee deems necessary or desirable for administration of the
Plan.
      (b) Decisions of the Committee shall be final, conclusive and binding on
all persons or entities, including the Company, any Participant, and any
Subsidiary. A majority of the members of the Committee may determine its actions
and fix the time and place of its meetings.
      (c) To the extent not inconsistent with applicable law, including
Section 162(m) of the Code, or the rules and regulations of the NASDAQ Stock
Market (or any other principal national securities exchange on which the Company
is then listed), the Committee may delegate to a committee of one or more
directors of the Company or, to the extent permitted by law, to one or more
executive officers or a committee of executive officers the right to grant
Awards to Employees who are not Directors or executive officers of the Company
and the authority to take action on behalf of the Committee pursuant to the Plan
to cancel or suspend Awards to Employees who are not Directors or executive
officers of the Company; provided, however, (i) the resolution providing such
authorization sets forth the total number of Awards such officer(s) may grant;
and (ii) the officer(s) shall report periodically to the Committee regarding the
nature and scope of the Awards granted pursuant to the authority delegated.
5. Options
      5.1. Grant of Options. Options may be granted hereunder to Participants
either alone or in addition to other Awards granted under the Plan; provided
that incentive stock options may be granted only to eligible Employees of the
Company or of any parent or subsidiary corporation (as permitted by Section 422
of the Code and the regulations thereunder). Any Option shall be subject to the
terms and conditions of this Article and to such additional terms and
conditions, not inconsistent with the provisions of the Plan, as the Committee
shall deem desirable.
      5.2. Award Agreements. All Options granted pursuant to this Article shall
be evidenced by a written Award Agreement in such form and containing such terms
and conditions as the Committee shall determine which are not inconsistent with
the provisions of the Plan. The terms of Options need not be the same with
respect to each Participant. Granting of an Option pursuant to the Plan shall
impose no obligation on the recipient to exercise such Option. Any individual
who is granted an Option pursuant to this Article may hold more than one Option
granted pursuant to the Plan at the same time. The Award Agreement also shall
specify whether the Option is intended to qualify as an “incentive stock option”
as defined in Section 422 of the Code.
      5.3. Option Price. Other than in connection with Substitute Awards, the
option price per each Share purchasable under any Option granted pursuant to
this Article shall not be less than 100% of the Fair Market Value of such Share
on the date of grant of such Option. Other than pursuant to Section 12.2, the
Committee shall not without the approval of the Company’s stockholders (a) lower
the option price per Share of an Option after it is granted, (b) cancel an
Option when the option price per Share exceeds the Fair Market Value of the
underlying Shares in exchange for another Award (other than in connection with
Substitute

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Awards), and (c) take any other action with respect to an Option that may be
treated as a repricing under the rules and regulations of the NASDAQ Stock
Market (or any other principal national securities exchange on which the Company
is then listed).
      5.4. Option Term. The term of each Option shall be fixed by the Committee
in its sole discretion; provided that no Option shall be exercisable after the
expiration of ten years from the date the Option is granted.
      5.5. Exercise of Options. Vested Options granted under the Plan shall be
exercised by the Participant or by a Permitted Assignee thereof (or by the
Participant’s executors, administrators, guardian or legal representative, as
may be provided in an Award Agreement) as to all or part of the Shares covered
thereby, by the giving of written notice of exercise to the Company or its
designated agent, specifying the number of Shares to be purchased, accompanied
by payment of the full purchase price for the Shares being purchased. Unless
otherwise provided in an Award Agreement, full payment of such purchase price
shall be made at the time of exercise and shall be made (a) in cash or cash
equivalents (including certified check or bank check or wire transfer of
immediately available funds), (b) 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 Company’s earnings), (c) with the consent
of the Committee, by delivery of other consideration (including, where permitted
by law and the Committee, other Awards) having a Fair Market Value on the
exercise date equal to the total purchase price, (d) with the consent of the
Committee, by withholding Shares otherwise issuable in connection with the
exercise of the Option, (e) through any other method specified in an Award
Agreement, or (f) any combination of any of the foregoing. The notice of
exercise, accompanied by such payment, shall be delivered to the Company at its
principal business office or such other office as the Committee may from time to
time direct, and shall be in such form, containing such further provisions
consistent with the provisions of the Plan, as the Committee may from time to
time prescribe. In no event may any Option granted hereunder be exercised for a
fraction of a Share. No adjustment shall be made for cash dividends or other
rights for which the record date is prior to the date of such issuance.
      5.6. Form of Settlement. In its sole discretion, the Committee may
provide, at the time of grant, that the Shares to be issued upon an Option’s
exercise shall be in the form of Restricted Stock or other similar securities,
or may reserve the right so to provide after the time of grant.
      5.7. Vesting. Except for certain limited situations (including the death,
disability or retirement of the Participant or a Change of Control referred to
in Article 11), Options shall vest over a period of not less than one year from
date of grant (but permitting pro rata vesting over such time); provided, that
such vesting shall not be required with respect to any Substitute Awards. The
vesting schedule shall be set forth in the Award Agreement.
      5.8. Incentive Stock Options. The Committee may grant Options intended to
qualify as “incentive stock options” as defined in Section 422 of the Code, to
any employee of the Company or any Subsidiary, subject to the requirements of
Section 422 of the Code. Notwithstanding anything in Section 3.1 to the contrary
and solely for the purposes of determining whether Shares are available for the
grant of “incentive stock options” under the Plan, the maximum aggregate number
of Shares with respect to which “incentive stock options” may be granted under
the Plan shall be the number of Shares authorized for grant under Section 3.1.
6. Stock Appreciation Rights
      6.1. Grant and Exercise. The Committee may provide Stock Appreciation
Rights (a) in conjunction with all or part of any Option granted under the Plan
or at any subsequent time during the term of such Option (“Tandem Stock
Appreciation Right”), (b) in conjunction with all or part of any Award (other
than an Option) granted under the Plan or at any subsequent time during the term
of such Award, or (c) without regard to any Option or other Award (a
“Freestanding Stock Appreciation Right”), in each case upon such terms and
conditions as the Committee may establish in its sole discretion.

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      6.2. Terms and Conditions. Stock Appreciation Rights shall be subject to
such terms and conditions, not inconsistent with the provisions of the Plan, as
shall be determined from time to time by the Committee, including the following:

        (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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7. Restricted Stock Awards
      7.1. Grants. Awards of Restricted Stock may be issued hereunder to
Participants either alone or in addition to other Awards granted under the Plan
(a “Restricted Stock Award”), and such Restricted Stock Awards shall also be
available as a form of payment of Performance Awards and other earned cash-based
incentive compensation. A Restricted Stock Award shall be subject to
restrictions imposed by the Committee covering a period of time specified by the
Committee (the “Restriction Period”). The Committee has absolute discretion to
determine whether any consideration (other than services) is to be received by
the Company or any Subsidiary as a condition precedent to the issuance of
Restricted Stock.
      7.2. Award Agreements. The terms of any Restricted Stock Award granted
under the Plan shall be set forth in a written Award Agreement which shall
contain provisions determined by the Committee and not inconsistent with the
Plan. The terms of Restricted Stock Awards need not be the same with respect to
each Participant.
      7.3. Rights of Holders of Restricted Stock. Beginning on the date of grant
of the Restricted Stock Award and subject to execution of the Award Agreement,
the Participant shall become a shareholder of the Company with respect to all
Shares subject to the Award Agreement and shall have all of the rights of a
shareholder, including the right to vote such Shares and the right to receive
distributions made with respect to such Shares unless otherwise provided in such
Award Agreement; provided, however, that any Shares or any other property (other
than cash) distributed as a dividend or otherwise with respect to any Restricted
Stock as to which the restrictions have not yet lapsed shall be subject to the
same restrictions as such Restricted Stock.
      7.4. Minimum Vesting Period. Except for certain limited situations
(including the death, disability or retirement of the Participant, or a Change
of Control referred to in Article 11), or special circumstances determined by
the Committee (such as the achievement of performance objectives) Restricted
Stock Awards subject solely to continued employment restrictions of employees of
the Company or any Subsidiary shall have a Restriction Period of not less than
three years from date of grant (but permitting pro rata vesting over such time);
provided, that the provisions of this Section shall not be applicable to any
grants to new hires to replace forfeited awards from a prior employer,
Substitute Awards or grants of Restricted Stock in payment of Performance Awards
and other earned cash-based incentive compensation or grants to non-employee
Directors. Subject to the foregoing three-year minimum vesting requirement, the
Committee may, in its sole discretion and subject to the limitations imposed
under Section 162(m) of the Code and the regulations thereunder in the case of a
Restricted Stock Award intended to comply with the performance-based exception
under Section 162(m) of the Code, waive the forfeiture period and any other
conditions set forth in any Award Agreement subject to such terms and conditions
as the Committee shall deem appropriate.
      7.5 Section 83(b) Election. The Committee may provide in an Award
Agreement that the Award of Restricted Stock is conditioned upon the Participant
making or refraining from making an election with respect to the Award under
Section 83(b) of the Code. If a Participant makes an election pursuant to
Section 83(b) of the Code concerning a Restricted Stock Award, the Participant
shall be required to file promptly a copy of such election with the Company.
8. Other Stock Unit Awards
      8.1. Grants. Other Awards of units having a value equal to an identical
number of Shares (“Other Stock Unit Awards”) may be granted hereunder to
Participants, in addition to other Awards granted under the Plan. Other Stock
Unit Awards shall also be available as a form of payment of other Awards granted
under the Plan and other earned cash-based incentive compensation.
      8.2. Award Agreements. The terms of Other Stock Unit Award granted under
the Plan shall be set forth in a written Award Agreement which shall contain
provisions determined by the Committee and not inconsistent with the Plan. The
terms of such Awards need not be the same with respect to each Participant.
      8.3. Vesting. Except for certain limited situations (including the death,
disability or retirement of the Participant or a Change of Control referred to
in Article 11), Other Stock Unit Awards subject solely to continued employment
restrictions of employees of the Company or any Subsidiary shall be subject to

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restrictions imposed by the Committee for a period of not less than three years
from date of grant (but permitting pro rata vesting over such time); provided,
that such restrictions shall not be applicable to any Substitute Awards, grants
of Other Stock Unit Awards in payment of Performance Awards pursuant to
Article 9 and other earned cash-based incentive compensation, or grants of Other
Stock Unit Awards on a deferred basis.
      8.4. Payment. Except as provided in Article 10 or as maybe provided in an
Award Agreement, Other Stock Unit Awards may be paid in cash, Shares, other
property, or any combination thereof, in the sole discretion of the Committee at
the time of payment. Other Stock Unit Awards may be paid in a lump sum or in
installments following the lapse of the restrictions applicable to such Awards,
but, unless expressly provided in an Award Agreement, no later than 21/2 months
following the end of the calendar year in which such restrictions lapse, or in
accordance with procedures established by the Committee, on a deferred basis
subject to the requirements of Section 409A of the Code.
9. Performance Awards
      9.1. Grants. Performance Awards in the form of Performance Shares or
Performance Units, as determined by the Committee in its sole discretion, may be
granted hereunder to Participants, for no consideration or for such minimum
consideration as may be required by applicable law, either alone or in addition
to other Awards granted under the Plan. The performance goals to be achieved for
each Performance Period shall be conclusively determined by the Committee and
may be based upon the criteria set forth in Section 10.2.
      9.2. Award Agreements. The terms of any Performance Award granted under
the Plan shall be set forth in a written Award Agreement which shall contain
provisions determined by the Committee and not inconsistent with the Plan,
including whether such Awards shall have Dividend Equivalents. The terms of
Performance Awards need not be the same with respect to each Participant.
      9.3. Terms and Conditions. The performance criteria to be achieved during
any Performance Period and the length of the Performance Period shall be
determined by the Committee upon the grant of each Performance Award; provided,
however, that a Performance Period shall not be shorter than 12 months nor
longer than five years. The amount of the Award to be distributed shall be
conclusively determined by the Committee.
      9.4. Payment. Except as provided in Article 11 or as may be provided in an
Award Agreement, Performance Awards will be distributed only after the end of
the relevant Performance Period. Performance Awards may be paid in cash, Shares,
other property, or any combination thereof, in the sole discretion of the
Committee at the time of payment. Performance Awards may be paid in a lump sum
or in installments, but, unless expressly provided in an Award Agreement, no
later than 21/2 months following the close of the calendar year that contains
the end of the Performance Period or, in accordance with procedures established
by the Committee, on a deferred basis subject to the requirements of
Section 409A of the Code.
10. Code Section 162(m) Provisions
      10.1. Covered Employees. Notwithstanding any other provision of the Plan,
if the Committee determines at the time a Restricted Stock Award, a Performance
Award or an Other Stock Unit Award is granted to a Participant who is, or is
likely to be, as of the end of the tax year in which the Company would claim a
tax deduction in connection with such Award, a Covered Employee, then the
Committee may provide that this Article 10 is applicable to such Award.
      10.2. Performance Criteria. If the Committee determines that a Restricted
Stock Award, a Performance Award or an Other Stock Unit Award is subject to this
Article 10, the lapsing of restrictions thereon and the distribution of cash,
Shares or other property pursuant thereto, as applicable, shall be subject to
the achievement of one or more objective performance goals established by the
Committee, which shall be based on the attainment of specified levels of one or
any combination of the following: net sales; revenue growth; pre-tax income
before allocation of corporate overhead and bonus; earnings per share; operating
income, net

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income; division, group or corporate financial goals; return on stockholders’
equity; total stockholder return; return on assets; attainment of strategic and
operational initiatives; appreciation in and/or maintenance of the price of the
Shares or any other publicly-traded securities of the Company; market share;
gross profits; earnings before taxes; earnings before interest and taxes;
earnings before interest, taxes, depreciation, depletion and amortization;
economic value-added models; comparisons with various stock market indices;
reductions in costs; cash flow, cash flow per share; return on invested capital,
cash flow return on investment; improvement in or attainment of expense levels
or working capital levels; cash margins; safety records; and rig utilization and
rig count growth. Such performance goals also may be based solely by reference
to the Company’s performance or the performance of a Subsidiary, division,
business segment or business unit of the Company, or based upon the relative
performance of other companies or upon comparisons of any of the indicators of
performance relative to other companies. The Committee may also exclude the
impact of an event or occurrence which the Committee determines should
appropriately be excluded, including (a) restructurings, discontinued
operations, extraordinary items, and other unusual or non-recurring charges,
(b) an event either not directly related to the operations of the Company or not
within the reasonable control of the Company’s management, or (c) the cumulative
effects of tax or accounting changes in accordance with generally accepted
accounting principles. Such performance goals shall be set by the Committee
within the time period prescribed by, and shall otherwise comply with the
requirements of, Section 162(m) of the Code, and the regulations thereunder.
      10.3. Adjustments. Notwithstanding any provision of the Plan (other than
Article 11), with respect to any Restricted Stock, Performance Award or Other
Stock Unit Award that is subject to this Section 10, the Committee may adjust
downwards, but not upwards, the amount payable pursuant to such Award, and the
Committee may not waive the achievement of the applicable performance goals,
except in the case of the death or disability of the Participant or as otherwise
determined by the Committee in special circumstances.
      10.4. Restrictions. The Committee shall have the power to impose such
other restrictions on Awards subject to this Article as it may deem necessary or
appropriate to ensure that such Awards satisfy all requirements for
“performance-based compensation” within the meaning of Section 162(m) of the
Code.
      10.5. Limitations on Grants to Individual Participant. Subject to
adjustment as provided in Section 12.2, no Participant may be granted
(i) Options or Stock Appreciation Rights during any 12-month period with respect
to more than 1,000,000 Shares or (ii) 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 (the “Limitations”). In addition
to the foregoing, the maximum dollar value payable to any Participant in any
12-month period with respect to Performance Awards is $5,000,000. If an Award is
cancelled, the cancelled Award shall continue to be counted toward the
applicable Limitations.
11. Change of Control Provisions
      Impact of Change of Control. The terms of any Award may provide in the
Award Agreement evidencing the Award that, upon a “Change of Control” of the
Company (as that term may be defined therein), (a) Options and Stock
Appreciation Rights outstanding as of the date of the Change of Control
immediately vest and become fully exercisable, (b) that Options and Stock
Appreciation Rights outstanding as of the date of the Change of Control may be
cancelled and terminated without payment therefor if the Fair Market Value of
one Share as of the date of the Change of Control is less than the per Share
Option exercise price or Stock Appreciation Right grant price, (c) restrictions
and deferral limitations on Restricted Stock lapse and the Restricted Stock
become free of all restrictions and limitations and become fully vested, (d) all
Performance Awards shall be considered to be earned and payable (either in full
or pro rata based on the portion of Performance Period completed as of the date
of the Change of Control), and any deferral or other restriction shall lapse and
such Performance Awards shall be immediately settled or distributed to the
extent permitted under Section 409A of the Code, (e) the restrictions and
deferral limitations and other conditions applicable to any Other Stock Unit
Awards or any other Awards shall lapse, and such Other Stock Unit Awards or such
other Awards shall become free of all restrictions, limitations or conditions
and become fully vested and transferable to the full extent of the original
grant to the extent permitted under Section 409A of the Code, and (f) such other
additional benefits as the Committee deems appropriate shall apply, subject in

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each case to any terms and conditions contained in the Award Agreement
evidencing such Award. For purposes of the Plan, a “Change of Control” shall
mean an event described in an Award Agreement evidencing the Award or such other
event as determined in the sole discretion of the Board. Notwithstanding any
other provision of the Plan, the Committee, in its discretion, may determine
that, upon the occurrence of a Change of Control of the Company, each Option and
Stock Appreciation Right outstanding shall terminate within a specified number
of days after notice to the Participant, and/or that each Participant shall
receive, with respect to each Share subject to such Option or Stock Appreciation
Right, an amount equal to the excess of the Fair Market Value of such Share
immediately prior to the occurrence of such Change of Control over the exercise
price per share of such Option and/or Stock Appreciation Right; such amount to
be payable in cash, in one or more kinds of stock or property (including the
stock or property, if any, payable in the transaction) or in a combination
thereof, as the Committee, in its discretion, shall determine.
12. Generally Applicable Provisions
      12.1. Amendment and Termination of the Plan. The Board may, from time to
time, alter, amend, suspend or terminate the Plan as it shall deem advisable,
subject to any requirement for stockholder approval imposed by applicable law,
including the rules and regulations of the NASDAQ Stock Market (or any other
principal national securities exchange on which the Company is listed) provided
that the Board may not amend the Plan in any manner that would result in
noncompliance with Rule 16b-3 of the Exchange Act; and further provided that the
Board may not, without the approval of the Company’s stockholders, amend the
Plan to (a) increase the number of Shares that may be the subject of Awards
under the Plan (except for adjustments pursuant to Section 12.2), (b) expand the
types of awards available under the Plan, (c) materially expand the class of
persons eligible to participate in the Plan, (d) amend any provision of
Section 5.3, (e) increase the maximum permissible term of any Option specified
by Section 5.4, or (f) amend any provision of Section 10.4. In addition, no
amendments to, or termination of, the Plan shall in any way impair the rights of
a Participant under any Award previously granted without such Participant’s
consent.
      12.2. Adjustments. 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, such adjustments
and other substitutions shall be made to the Plan and to Awards as the
Committee, in its sole discretion, deems equitable or appropriate, including
such adjustments in the aggregate number, class and kind of securities that may
be delivered under the Plan and, in the aggregate or to any one Participant, in
the number, class, kind and option or exercise price of securities subject to
outstanding Awards granted under the Plan (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) as the Committee may
determine to be appropriate in its sole discretion; provided, however, that the
number of Shares subject to any Award shall always be a whole number.
      12.3. Transferability of Awards. Except as provided below, no Award and no
Shares subject to Awards described in Article 8 that have not been issued or as
to which any applicable restriction, performance or deferral period has not
lapsed, may be sold, assigned, transferred, pledged or otherwise encumbered,
other than by will or the laws of descent and distribution, and such Award may
be exercised during the life of the Participant only by the Participant or the
Participant’s guardian or legal representative. Notwithstanding the foregoing, a
Participant may assign or transfer an Award with the consent of the Committee
(i) for charitable donations; (ii) to the Participant’s spouse, children or
grandchildren (including any adopted and stepchildren and grandchildren), or
(iii) a trust for the benefit of one or more of the Participants 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 the Award Agreement relating to the
transferred Award and shall execute an agreement satisfactory to the Company
evidencing such obligations; and provided further that such Participant shall
remain bound by the terms and conditions of the Plan. The Company shall
cooperate with any Permitted Assignee and the Company’s transfer agent in
effectuating any transfer permitted under this Section. Notwithstanding the
foregoing, no Incentive Stock Option granted under the Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or

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hypothecated, other than by will or by the laws of descent and distribution.
Further, all Incentive Stock Options granted to a Participant under this Plan
shall be exercisable during his or her lifetime only by such Participant.
      12.4. Termination of Employment. The Committee shall determine and set
forth in each Award Agreement whether any Awards granted in such Award Agreement
will continue to be exercisable, and the terms of such exercise, on and after
the date that a Participant ceases to be employed by or to provide services to
the Company or any Subsidiary (including as a Director), whether by reason of
death, disability, voluntary or involuntary termination of employment or
services, or otherwise. The date of termination of a Participant’s employment or
services will be determined by the Committee, which determination will be final.
      12.5. Deferral; Dividend Equivalents. The Committee shall be authorized to
establish procedures pursuant to which the payment of any Award may be deferred.
Such deferrals shall be administered in a manner that is intended to comply with
Section 409A of the Code and shall be construed and interpreted in accordance
with such intent. Subject to the provisions of the Plan and any Award Agreement,
the recipient of an Award (including any deferred Award) may, if so determined
by the Committee, be entitled to receive, currently or on a deferred basis,
cash, stock or other property dividends, or cash payments in amounts equivalent
to cash, stock or other property dividends on Shares (“Dividend Equivalents”)
with respect to the number of Shares covered by the Award, as determined by the
Committee, in its sole discretion. The Committee may provide that such amounts
and Dividend Equivalents (if any) shall be deemed to have been reinvested in
additional Shares or otherwise reinvested and may provide that such amounts and
Dividend Equivalents are subject to the same vesting or performance conditions
as the underlying Award.
13. Miscellaneous
      13.1. Tax Withholding. The Company shall have the right to make all
payments or distributions pursuant to the Plan to a Participant (or a Permitted
Assignee thereof) (any such person, a “Payee”) net of any applicable federal,
state and local taxes required to be paid or withheld as a result of (a) the
grant of any Award, (b) the exercise of an Option or Stock Appreciation Right,
(c) the delivery of Shares or cash, (d) the lapse of any restrictions in
connection with any Award or (e) any other event occurring pursuant to the Plan.
The Company or any Subsidiary shall have the right to withhold from wages or
other amounts otherwise payable to such Payee such minimum statutory withholding
taxes as may be required by law, or to otherwise require the Payee to pay such
withholding taxes. If the Payee shall fail to make such tax payments as are
required, the Company or its Subsidiaries shall, to the extent permitted by law,
have the right to deduct any such taxes from any payment of any kind otherwise
due to such Payee or to take such other action as may be necessary to satisfy
such withholding obligations. The Committee shall be authorized to establish
procedures for election by Participants 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 Company’s earnings), or by directing the Company to retain
Shares (up to the Participant’s minimum required tax withholding rate or such
other rate that will not trigger a negative accounting impact) otherwise
deliverable in connection with the Award.
      13.2. Right of Discharge Reserved; Claims to Awards. Nothing in the Plan
nor the grant of an Award hereunder shall confer upon any Employee or Director
the right to continue in the employment or service of the Company or any
Subsidiary or affect any right that the Company or any Subsidiary may have to
terminate the employment or service of (or to demote or to exclude from future
Awards under the Plan) any such Employee or Director at any time for any reason.
Except as specifically provided by the Committee, the Company shall not be
liable for the loss of existing or potential profit from an Award granted in the
event of termination of an employment or other relationship. No Employee or
Participant shall have any claim to be granted any Award under the Plan, and
there is no obligation for uniformity of treatment of Employees or Participants
under the Plan.
      13.3. Prospective Recipient. The prospective recipient of any Award under
the Plan shall not, with respect to such Award, be deemed to have become a
Participant, or to have any rights with respect to such

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Award, until and unless such recipient shall have executed an agreement or other
instrument evidencing the Award and delivered a copy thereof to the Company, and
otherwise complied with the then applicable terms and conditions.
      13.4. Cancellation of Award. Notwithstanding anything to the contrary
contained herein, all outstanding Awards granted to any Participant shall be
canceled if the Participant, without the consent of the Company, while employed
by the Company or any Subsidiary or after termination of such employment or
service, establishes a relationship with a competitor of the Company or any
Subsidiary or engages in activity that is in conflict with or adverse to the
interest of the Company or any Subsidiary, as determined by the Committee in its
sole discretion.
      13.5. Stop Transfer Orders. All certificates for Shares delivered under
the Plan pursuant to any Award shall be subject to such stop-transfer orders and
other restrictions as the Committee may deem advisable under the rules,
regulations and other requirements of the Securities and Exchange Commission,
any stock exchange upon which the Shares are then listed, and any applicable
federal or state securities law, and the Committee may cause a legend or legends
to be put on any such certificates to make appropriate reference to such
restrictions.
      13.6. Nature of Payments. All Awards made pursuant to the Plan are in
consideration of services performed or to be performed for the Company or any
Subsidiary, division or business unit of the Company. Any income or gain
realized pursuant to Awards under the Plan and any Stock Appreciation Rights
constitute a special incentive payment to the Participant and shall not be taken
into account, to the extent permissible under applicable law, as compensation
for purposes of any of the employee benefit plans of the Company or any
Subsidiary except as may be determined by the Committee or by the Board or board
of directors of the applicable Subsidiary.
      13.7. Other Plans. Nothing contained in the Plan shall prevent the Board
from adopting other or additional compensation arrangements, subject to
stockholder approval if such approval is required; and such arrangements may be
either generally applicable or applicable only in specific cases.
      13.8. Severability. If any provision of the Plan shall be held unlawful or
otherwise invalid or unenforceable in whole or in part by a court of competent
jurisdiction, such provision shall (a) be deemed limited to the extent that such
court of competent jurisdiction deems it lawful, valid and/or enforceable and as
so limited shall remain in full force and effect, and (b) not affect any other
provision of the Plan or part thereof, each of which shall remain in full force
and effect. If the making of any payment or the provision of any other benefit
required under the Plan shall be held unlawful or otherwise invalid or
unenforceable by a court of competent jurisdiction, such unlawfulness,
invalidity or unenforceability shall not prevent any other payment or benefit
from being made or provided under the Plan, and if the making of any payment in
full or the provision of any other benefit required under the Plan in full would
be unlawful or otherwise invalid or unenforceable, then such unlawfulness,
invalidity or unenforceability shall not prevent such payment or benefit from
being made or provided in part, to the extent that it would not be unlawful,
invalid or unenforceable, and the maximum payment or benefit that would not be
unlawful, invalid or unenforceable shall be made or provided under the Plan.
      13.9. Construction. As used in the Plan, the words “include” and
“including,” and variations thereof, shall not be deemed to be terms of
limitation, but rather shall be deemed to be followed by the words “without
limitation.”
      13.10. Unfunded Status of the Plan. The Plan is intended to constitute an
“unfunded” plan for incentive and deferred compensation. With respect to any
payments not yet made to a Participant by the Company, nothing contained herein
shall give any such Participant any rights that are greater than those of a
general creditor of the Company. In its sole discretion, the Committee may
authorize the creation of trusts or other arrangements to meet the obligations
created under the Plan to deliver the Shares or payments in lieu of or with
respect to Awards hereunder; provided, however, that the existence of such
trusts or other arrangements is consistent with the unfunded status of the Plan.

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      13.11. Governing Law. The Plan and all determinations made and actions
taken thereunder, to the extent not otherwise governed by the Code or the laws
of the United States, shall be governed by the laws of the State of Delaware,
without reference to principles of conflict of laws, and construed accordingly.
      13.12. Effective Date of Plan; Termination of Plan. The Plan shall be
effective on the date of the approval of the Plan by the holders of the shares
entitled to vote at a duly constituted meeting of the stockholders of the
Company. The Plan shall be null and void and of no effect if the foregoing
condition is not fulfilled and in such event each Award shall, notwithstanding
any of the preceding provisions of the Plan, be null and void and of no effect.
Awards may be granted under the Plan at any time and from time to time on or
prior to the tenth anniversary of the effective date of the Plan, on which date
the Plan will expire except as to Awards then outstanding under the Plan. Such
outstanding Awards shall remain in effect until they have been exercised or
terminated, or have expired.
      13.13. Foreign Employees. Awards may be granted to Participants who are
foreign nationals or employed outside the United States, or both, on such terms
and conditions different from those applicable to Awards to Employees employed
in the United States as may, in the judgment of the Committee, be necessary or
desirable in order to recognize differences in local law or tax policy. The
Committee also may impose conditions on the exercise or vesting of Awards in
order to minimize the Company’s obligation with respect to tax equalization for
Employees on assignments outside their home country.
      13.14. Compliance with Section 409A of the Code. This Plan is intended to
comply and shall be administered in a manner that is intended to comply with
Section 409A of the Code and shall be construed and interpreted in accordance
with such intent. To the extent that an Award or the payment, settlement or
deferral thereof is subject to Section 409A of the Code, the Award shall be
granted, paid, settled or deferred in a manner that will comply with
Section 409A of the Code, including regulations or other guidance issued with
respect thereto, except as otherwise determined by the Committee. Any provision
of this Plan that would cause the grant of an Award or the payment, settlement
or deferral thereof to fail to satisfy Section 409A of the Code shall be amended
to comply with Section 409A of the Code on a timely basis, which may be made on
a retroactive basis, in accordance with regulations and other guidance issued
under Section 409A of the Code.
      13.15. Captions. The captions in the Plan are for convenience of reference
only, and are not intended to narrow, limit or affect the substance or
interpretation of the provisions contained herein.
      13.16 Notification of Disqualifying Disposition. If any Participant shall
make any disposition of Shares issued pursuant to the exercise of an incentive
stock option under the circumstances described in Section 421(b) of the Code
(relating to certain disqualifying dispositions), such Participant shall notify
the Company of such disposition within ten (10) days thereof.
      13.17 Sarbanes Oxley Act. If the Company is required to prepare an
accounting restatement due to the material noncompliance of the Company, as a
result of misconduct, with any financial reporting requirement under the
securities laws, or if the Participant is one of the persons subject to
automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002, the
Participant shall reimburse the Company the amount of any payment in settlement
of an Award earned or accrued during the twelve-month period following the first
public issuance or filing with the United States Securities and Exchange
Commission (whichever just occurred) of the financial document embodying such
financial reporting requirement.
      13.18 Retirement and Welfare Plans. Neither Awards made under the Plan nor
Shares or cash paid pursuant to such Awards, may be included as “compensation”
for purposes of computing the benefits payable to any Participant under the
Company’s or any Subsidiary’s retirement plans (both qualified and
non-qualified) or welfare benefit plans unless such other plan expressly
provides that such compensation shall be taken into account in computing a
participant’s benefit.
      13.19 Indemnification. Each person who is or shall have been a member of
the Board, or a Committee appointed by the Board, or an officer of the Company
to whom authority was delegated in accordance with Section 4.2 shall be
indemnified and held harmless by the Company against and from any loss, cost,
liability, or expense that may be imposed upon or reasonably incurred by him or
her in connection with or resulting

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from any claim, action, suit, or proceeding to which he or she may be a party or
in which he or she may be involved by reason of any action taken or failure to
act under the Plan and against and from any and all amounts paid by him or her
in settlement thereof, with the Company’s approval, or paid by him or her in
satisfaction of any judgment in any such action, suit, or proceeding against him
or her, provided he or she shall give the Company an opportunity, at its own
expense, to handle and defend the same before he or she undertakes to handle and
defend it on his or her own behalf, unless such loss, cost, liability, or
expense is a result of his or her own willful misconduct or except as expressly
provided by statute. The foregoing right of indemnification shall not be
exclusive of any other rights of indemnification to which such persons may be
entitled under the Company’s Certificate of Incorporation of Bylaws, as a matter
of law, or otherwise, or any power that the Company may have to indemnify them
or hold them harmless.

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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 Company’s 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 Company’s 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
Recipient’s name the following Shares as Restricted Shares: ___shares of the
Company’s common stock, $.01 par value per share. The Company shall cause
certificates evidencing the Restricted Shares to be issued in the Recipient’s
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 Recipient’s 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 Recipient’s 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 Recipient’s
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 Recipient’s 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 Recipient’s 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
Company’s earnings), or by directing the Company to retain Shares (up to the
Recipient’s 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.

-5-

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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 Recipient’s 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 Recipient’s address and facsimile number (if applicable)
indicated beneath the Recipient’s 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

-6-

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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 Recipient’s 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]

-7-

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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.:
      By:           Name:           Title:           RECIPIENT:       Name:    
    Address:                                 Facsimile No.:    

 

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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 undersigned’s 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 Employee’s 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

1

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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 Company’s 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

2

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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
Company’s 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 Company’s 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

3

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    of the Committee, or, in the event of the death or disability of the
Employee, the Employee’s 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 Employee’s 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 Employee’s 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

4

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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 Employee’s
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 Employee’s executor,
administrator, or the person to whom the Option shall be transferred by the
Employee’s will or the laws of descent and distribution shall have until the end
of the original three-year time period to exercise the Employee’s 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 Employee’s
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.

5

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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 Employee’s 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 Employee’s 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 Company’s earnings), or by directing the Company to retain Shares
(up to the Employee’s 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 Employee’s address and facsimile

6

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    number (if applicable) indicated beneath the Employee’s 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 Employee’s 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.:
      By:         Name:         Title:      

            EMPLOYEE:
                             

8

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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 Optionee’s social security number is:                              .

ACKNOWLEDGMENTS:

1.   I understand that all sales of purchased Shares are subject to compliance
with the Company’s 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-UTI’s 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.

     
OPTIONEE’S SIGNATURE
  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 Company’s 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 Company’s 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 Recipient’s name the following Shares as
Restricted Shares: ___shares of the Company’s common stock, $.01 par value per
share. The Company shall cause certificates evidencing the Restricted Shares to
be issued in the Recipient’s 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 Recipient’s 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

-3-

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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 Recipient’s 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 Recipient’s 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

-4-

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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 Recipient’s address and facsimile number (if applicable)
indicated beneath the Recipient’s 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

-5-

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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 Recipient’s 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.

[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.:
 
       

  By:    

       

  Name:    

       

  Title:    

       
 
       

  RECIPIENT:    
 
       
 
   

  Name:    

       

  Address:    

       
 
       

       
 
       

       

  Facsimile No.:    

       

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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 undersigned’s 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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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 Director’s 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 Company’s 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.

1

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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 Company’s 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

2

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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 Company’s 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 Director’s 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 Director’s 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 Director’s 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 Director’s 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 Director’s executor, administrator, or the
person to whom the Option shall be transferred by the Director’s will or the
laws of descent and distribution shall have until the end of the original
three-year time period to exercise the Director’s 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 Director’s 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 Director’s
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 Director’s 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 Director’s address and facsimile number (if applicable)
indicated beneath the Director’s 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 Director’s 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.

[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.:
 
       

  By:    

       

  Name:    

       

  Title:    

       
 
       

  DIRECTOR:    
 
       
 
   
 
       

     

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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 Optionee’s social security number is: .

ACKNOWLEDGMENTS:

1.   I understand that all sales of purchased Shares are subject to compliance
with the Company’s 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-UTI’s 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.

     
OPTIONEE’S SIGNATURE
  DATE:
 
   
 
   

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