Exhibit 10.2

PATTERSON-UTI ENERGY, INC.

2014 LONG-TERM INCENTIVE PLAN

SHARE-SETTLED

PERFORMANCE SHARE AWARD AGREEMENT

                    , 20        

 

1. Performance Share Award. The Compensation Committee (the “Committee”) of the
Board of Directors of Patterson-UTI Energy, Inc., a Delaware corporation (the
“Company”), pursuant to the Patterson-UTI Energy, Inc. 2014 Long-Term Incentive
Plan, as amended from time to time (the “Plan”), hereby awards to
                     (the “Grantee”), effective as of the Date of Award set
forth above, a Performance Share Award (the “Award”) on the terms and conditions
as set forth in this agreement (this “Agreement”).

 

  1.1 General Performance Criteria. The Award provides the Grantee an
opportunity to receive Shares based upon the Company’s total stockholder return
for the Performance Period (as that term is defined below) as compared with the
total stockholder returns of the peer index companies set forth on Exhibit A
(the “Peer Index Companies”) for such period. Total shareholder return for the
Company will be measured based on $100 invested in the Company’s common stock on
the first day of the Performance Period, with dividends reinvested.

 

  1.2 Issuance of Shares Upon Achievement of Performance Criteria as of the
Final Day of the Performance Period. If (a) the Company’s total stockholder
return (dividends during the Performance Period, if any, are assumed to be
reinvested) for the three-year period (the “Performance Period”) ending
                    , 20         (the “Final Day of the Performance Period”), is
positive and equals or exceeds the 25th percentile of the total stockholder
returns of the Peer Index Companies for the Performance Period, (b) a Change in
Control of the Company has not occurred on or before the Final Day of the
Performance Period, and (c) the Grantee remains in the active employ of the
Company through the Final Day of the Performance Period, then the Company shall
issue to the Grantee the number of Shares determined as follows:

 

  (i) if the Company’s total stockholder return for the Performance Period is
equal to the 50th percentile rank of the Company’s total stockholder return for
the Performance Period as compared to the total stockholder returns of the Peer
Index Companies,                      Shares (the “Target Amount”);

 

  (ii)

if the Company’s total stockholder return for the Performance Period is greater
than the 25th percentile rank of the Company’s total stockholder return for the
Performance Period as compared to the total stockholder returns of the Peer
Index Companies but less than the 50th percentile, one

 

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  half times the Target Amount plus the product of one half times the Target
Amount multiplied by the quotient obtained by dividing the difference of the
percentile rank achieved for the Performance Period (expressed as a percentage)
minus 25 percent (25%) by 25 percent (25%) (i.e., (0.5 x Target Amount) + [(0.5
x Target Amount) x ((percentile rank (%) – 0.25)/0.25)]); or

 

       E.g., assume that the Target Amount of the Award is                    
Shares and the total stockholder return of the Company for the Performance
Period as compared to the total stockholder returns of the Peer Index Companies
ranks in the 40th percentile. The total amount of Shares issuable to the Grantee
under the Award would be                     Shares, which is determined as
follows: (0.5 x                     ) + [(0.5 x                     ) x
((40%—25%)/25%)] =                     + [                    x (15%/25%)] =
                    +[                    x 60%] =                     +
                    =                     .

 

  (iii) if the Company’s total stockholder return achieved for the Performance
Period is greater than the 50th percentile rank of the Company’s total
stockholder return for the Performance Period as compared to the total
stockholder returns of the Peer Index Companies but less than the 75th
percentile, the Target Amount plus the product of the Target Amount multiplied
by the quotient obtained by dividing the difference of the percentile rank
achieved for the Performance Period (expressed as a percentage) minus 50 percent
(50%) by 25 percent (25%) (i.e., (Target Amount) + [(Target Amount) x
((percentile rank (%) – 0.50)/0.25)]); or

 

       E.g., assume that the same facts as the example above in clause (iii)
except that the total stockholder return of the Company for the Performance
Period as compared to the total stockholder returns of the Peer Index Companies
ranks in the 60th percentile. The total amount of Shares issuable to the Grantee
under the Award would be                      Shares, which is determined as
follows: (            ) + [(            ) x ((60%—50%)/25%)] =
                     + [                     x (10%/25%)] =                     
+[                    x 40%] =                     +                     =
                    .

 

  (iv) if the Company’s total stockholder return for the Performance Period is
equal to or greater than the 75th percentile rank of the Company’s total
stockholder return for the Performance Period as compared to the total
stockholder returns of the Peer Index Companies, two times the Target Amount.

 

  1.3 Forfeiture. Notwithstanding any other provision of this Agreement to the
contrary, the Award pursuant to this Agreement shall lapse and be forfeited on
the Final Day of the Performance Period if (a) the Company’s total stockholder
return for the Performance Period is less than the 25th percentile of the total
stockholder returns of the Peer Index Companies for the Performance Period and
(b) a Change in Control of the Company has not occurred on or before the Final
Day of the Performance Period.

 

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  1.4 Committee Determination. Pursuant to Articles 4 and 9 of the Plan, the
Committee shall have the discretion to calculate the total stockholder returns
for the Performance Period for the Peer Index Companies, including the Company,
and to determine the formula to achieve such calculations.

 

       The Committee’s determinations with respect to the Performance Period for
purposes of this Agreement shall be binding upon all persons. The Committee may
not increase the Shares issuable under this Agreement. The Committee may, in its
sole discretion, make such adjustments as it deems necessary and appropriate, if
any, in the composition of the group of Peer Index Companies to address the
merger or consolidation of any company in the Peer Index Companies as of the
date hereof with another company, an acquisition or disposition of a significant
portion of such company’s businesses or assets as it exists on the date hereof,
or any other extraordinary event occurring in relation to such company during
the term of this Agreement.

 

       Prior to an issuance of Shares made pursuant to Section 1.2 and as
provided in Section 2 or Section 3.4, the Compensation Committee of the Board of
Directors of the Company shall determine if the performance criteria for such
issuance has been satisfied and, to the extent such performance criteria has
been satisfied, shall certify in writing that such performance criteria has been
satisfied.

 

2. TIME OF ISSUANCE OF SHARES. For purposes of this Agreement, unless otherwise
provided under the Plan or Section 3.4 of this Agreement, the Company shall
cause the Shares to be issued to the Grantee pursuant to Section 1.2 on or
before the 75th day following the Final Day of the Performance Period. Any
Shares issued pursuant to this Agreement will be issued to the Grantee or, if
issuable pursuant to Section 3.3, the Grantee’s legal representative or the
Grantee’s estate, and thereafter the Grantee or, if applicable, the Grantee’s
estate and heirs, executors, administrators and the Grantee’s legal
representatives shall have no further rights with respect to the Award or this
Agreement.

 

3. TERMINATION OF EMPLOYMENT/CHANGE IN CONTROL. The following provisions will
apply in the event the Grantee’s employment with the Company terminates, or a
Change in Control of the Company (as defined below) occurs, before the Final Day
of the Performance Period.

 

  3.1 Definitions. For purposes of this Agreement, the following terms shall
have the meanings ascribed to them under this Section:

 

  (i)

The Grantee will have a “Disability” if the Grantee qualifies for long-term
disability benefits under a long-term disability program sponsored by the
Company in which executive officers participate generally or, if the Company
does not sponsor such a long-term disability program, the Grantee is unable to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be

 

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expected to result in death or can be expected to last for a continuous period
of not less than 12 months.

 

  (ii) “Retirement” means the voluntary termination of the Grantee’s employment
relationship with the Company (i) on or after the date on which the Grantee
attains age 55 and (ii) on or after the date on which the sum of the Grantee’s
age and number of full years of service total 70.

 

  (iii) A “Change in Control of the Company” shall mean the occurrence of any of
the following after the Grant Date and prior to the date on which the
Performance Share Award is forfeited in accordance with Section 1.3:

 

  (1) 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 subclause (1) of this Section 3.1(iii), 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 subclause (3) of this Section 3.1(iii); or

 

  (2) Individuals who, as of the Grant Date, constitute the Board (the
“Incumbent Board”) cease for any reason to constitute at least a majority of the
Board; 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

 

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  (3) 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, providing for such Business Combination.

 

  3.2 Termination Generally. Except as specified in Section 3.3 and 3.4 below,
all of the Grantee’s rights in this Agreement, including all rights to the
Performance Share Award granted to the Grantee, will lapse and be completely
forfeited on the date the Grantee’s employment terminates if the Grantee’s
employment with the Company terminates on or before the Final Day of the
Performance Period for Shares issuable pursuant to Section 1.2, if any, for any
reason other than death, Disability or Retirement.

 

  3.3 Death, Disability or Retirement. Notwithstanding any other provision of
this Agreement to the contrary, if the Grantee’s employment with the Company
terminates due to the Grantee’s death, Disability, or Retirement after the
completion of at least one month of the Performance Period and on or before the
Final Day of the Performance Period for Shares issuable pursuant to Section 1.2,

 

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  if any, then the Company will cause Shares to be issued to the Grantee, at
such time as provided in Section 2, an amount equal to the product of (1) and
(2) where (1) is the amount the Grantee would have received under this Agreement
if the Grantee’s employment with the Company had not been terminated due to the
Grantee’s death, Disability or Retirement before such Final Day of the
Performance Period and (2) is a fraction, the numerator of which is the number
of days from the beginning of the Performance Period through the date of the
Grantee’s death, or the Grantee’s termination of employment with the Company due
to a Disability or Retirement up to a maximum of 1095 days and the denominator
of which is 1095.

 

  3.4 Change in Control. Notwithstanding anything in the Agreement to the
contrary, the Company (or its successor) will cause to be issued to the Grantee
immediately preceding a Change in Control of the Company a number of Shares in
an amount equal to the Target Amount, and thereafter the Company (or its
successor) will have no further obligations to the Grantee pursuant to this
Agreement; provided, however, that this Section 3.4 shall not apply if the
Grantee is the Covered Person or forms part of the Covered Person below 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.

 

4. TAX WITHHOLDING. To the extent that the grant, vesting or issuance of Shares
under the Agreement results in income to the Grantee 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 Grantee
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 Grantee fails to do so, the Company or its Subsidiary is
authorized to withhold from wages or other amounts otherwise payable to such
Grantee 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. Subject to restrictions that the Committee, in its sole discretion,
may impose, the Grantee may 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 Grantee’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 granted
hereunder until all applicable federal, state and local income, employment,
excise or other tax withholding requirements have been satisfied.

 

5.

TRANSFER RESTRICTIONS. The Performance Share Award 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 pursuant
to this Agreement. Any such attempted sale, assignment, pledge, exchange,
hypothecation, transfer, encumbrance or disposition in violation of this
Agreement shall be void and the

 

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Company shall not be bound thereby. Notwithstanding the foregoing, the Grantee
may assign or transfer the Performance Share Award granted hereby pursuant to a
qualified domestic relations order (as defined in Section 414(p) of the Code, 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 Grantee’s spouse, children or grandchildren (including any adopted
and stepchildren and grandchildren), or (iii) a trust for the benefit of the
Grantee 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 provided further that the Grantee shall remain bound by the terms
and conditions of the Plan. Further, the Shares granted hereby that are no
longer subject to forfeiture 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 Grantee 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.

 

6. CAPITAL ADJUSTMENTS AND REORGANIZATIONS. The existence of the Performance
Share Award shall not affect in any way the right or power of the Company 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.

 

7. PERFORMANCE SHARE AWARD DOES NOT AWARD ANY RIGHTS OF A STOCKHOLDER. The
Grantee shall not have the voting rights or any of the other rights, powers or
privileges of a holder of the stock of the Company with respect to the
Performance Share Award that are awarded hereby. Only after the Shares are
issued in exchange for the Grantee’s rights under this Agreement will the
Grantee have all of the rights of a shareholder with respect to such Shares
issued in exchange for such rights.

 

8. EMPLOYMENT RELATIONSHIP. For purposes of this Agreement, the Grantee shall be
considered to be in the employment of the Company as long as the Grantee has an
employment relationship with the Company and any of its Subsidiaries. The
Committee shall determine any questions as to whether and when there has been a
termination of such employment relationship, and the cause of such termination,
under the Plan, and the Committee’s determination shall be final and binding on
all persons.

 

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 Grantee and the Company or any Affiliate
or guarantee the right to remain employed by the Company or any Affiliate for
any specified term.

 

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10. LIMIT OF LIABILITY. Under no circumstances will the Company or an Affiliate
be liable for any indirect, incidental, consequential or special damages
(including lost profits) of any form incurred by any person, whether or not
foreseeable and regardless of the form of the act in which such a claim may be
brought, with respect to the Plan.

 

11. COMPANY LIABLE FOR ISSUANCE OF SHARES. Except as specified in Section 3.4,
the Company is liable for the issuance of any Shares that become issuable under
this Agreement.

 

12. SECURITIES ACT LEGEND. The Grantee 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.

 

13. 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.

 

14. MISCELLANEOUS. This Agreement is awarded pursuant to and is subject to all
of the provisions of the Plan, including amendments to the Plan, if any.
Capitalized terms that are not defined herein shall have the meanings ascribed
to such terms in the Plan.

[SIGNATURE PAGE TO FOLLOW]

 

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In accepting the Performance Share Award set forth in this Agreement the Grantee
accepts and agree to be bound by all the terms and conditions of the Plan and
this Agreement.

 

PATTERSON-UTI ENERGY, INC. By:  

 

Name:  

 

Title:  

 

 

 

 

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EXHIBIT A

Peer Index

The Peer Index Companies shall be [Atwood Oceanics Inc., Baker Hughes
Incorporated, Basic Energy Services Inc., Cameron International Corporation,
Diamond Offshore Drilling Inc., Ensco plc, FMC Technologies, Inc., Halliburton
Company, Helmerich & Payne Inc., Key Energy Services Inc., Nabors Industries
Ltd., National-Oilwell Varco, Inc., Noble Corp., Parker Drilling Co, Pioneer
Energy Services Corp., Precision Drilling Corporation, Rowan Companies plc,
Transocean Ltd., Unit Corp. and Weatherford International Ltd.], as such group
of companies may be adjusted pursuant to Section 1.4.

 

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