Exhibit 10.3
PIONEER DRILLING SERVICES, LTD.
EXECUTIVE SEVERANCE PLAN
I.
PURPOSES OF PLAN AND DEFINITIONS
1.1
PURPOSES.
THIS PIONEER DRILLING SERVICES, LTD. EXECUTIVE
SEVERANCE PLAN (THE "PLAN"), FOR SELECTED SENIOR MANAGEMENT EMPLOYEES OF PIONEER
DRILLING SERVICES, LTD., A TEXAS LIMITED PARTNERSHIP, AND ANY SUCCESSOR THERETO
(THE "PARTNERSHIP") AND ITS AFFILIATES, IS INTENDED TO ASSIST THE PARTNERSHIP IN
ATTRACTING AND RETAINING COMPETENT AND CAPABLE EXECUTIVES TO PERFORM SERVICES
FOR PIONEER DRILLING COMPANY, A TEXAS CORPORATION (THE "COMPANY") AND ITS
SUBSIDIARIES (INCLUDING THE PARTNERSHIP), TO PROVIDE GREATER INCENTIVES TO SUCH
EXECUTIVES TO ATTAIN AND MAINTAIN HIGH LEVELS OF PERFORMANCE, AND TO PROVIDE
SOME PROTECTION FOR LOSS OF SALARY AND BENEFITS IN THE EVENT OF CERTAIN
INVOLUNTARY TERMINATIONS OR CHANGES IN CONTROL OF THE COMPANY.
1.2
DEFINITIONS.
"AFFILIATE" MEANS, WITH RESPECT TO ANY PERSON, ANY OTHER PERSON THAT, DIRECTLY
OR INDIRECTLY THROUGH ONE OR MORE INTERMEDIARIES, CONTROLS, IS CONTROLLED BY OR
IS UNDER COMMON CONTROL WITH THE PERSON IN QUESTION.
AS USED HEREIN, THE TERM
"CONTROL" MEANS THE POSSESSION, DIRECT OR INDIRECT, OF THE POWER TO DIRECT OR
CAUSE THE DIRECTION OF THE MANAGEMENT AND POLICIES OF A PERSON, WHETHER THROUGH
OWNERSHIP OF VOTING SECURITIES, BY CONTRACT OR OTHERWISE.
"AIP" MEANS THE PIONEER DRILLING SERVICES, LTD. ANNUAL INCENTIVE COMPENSATION
PLAN, AS FROM TIME TO TIME IN EFFECT, INCLUDING ANY SUCCESSOR PLAN.
"ASSOCIATE" MEANS, WITH REFERENCE TO ANY PERSON (AS DEFINED BELOW), (I) ANY
CORPORATION, FIRM, PARTNERSHIP, ASSOCIATION, UNINCORPORATED ORGANIZATION OR
OTHER ENTITY (OTHER THAN THE COMPANY OR ANY OF ITS AFFILIATES (INCLUDING THE
PARTNERSHIP)) OF WHICH THAT PERSON IS AN OFFICER OR GENERAL PARTNER (OR OFFICER
OR GENERAL PARTNER OF A GENERAL PARTNER) OR IS, DIRECTLY OR INDIRECTLY, THE
BENEFICIAL OWNER (AS DEFINED BELOW) OF 10% OR MORE OF ANY CLASS OF ITS EQUITY
SECURITIES, (II) ANY TRUST OR OTHER ESTATE IN WHICH THAT PERSON HAS A
SUBSTANTIAL BENEFICIAL INTEREST OR FOR OR OF WHICH THAT PERSON SERVES AS TRUSTEE
OR IN A SIMILAR FIDUCIARY CAPACITY AND (III) ANY RELATIVE OR SPOUSE OF THAT
PERSON, OR ANY RELATIVE OF THAT SPOUSE, WHO HAS THE SAME HOME AS THAT PERSON.
"BASE SALARY" MEANS THE ANNUAL BASE SALARY OF A PARTICIPANT, AS ESTABLISHED BY
THE COMMITTEE (AS DEFINED BELOW) FOR A FISCAL YEAR.
"BENEFICIAL OWNER." A PERSON IS DEEMED THE "BENEFICIAL OWNER" OF, AND IS DEEMED
TO "BENEFICIALLY OWN," ANY SECURITIES:
(i)
of which that Person or any of its Affiliates or Associates,
directly or indirectly, is the "beneficial owner" (as determined pursuant to
Rule 13d-3 under the Exchange Act (as defined below)) or otherwise has the right
to vote or dispose of, including pursuant to any agreement, arrangement or
understanding (whether or not in
writing); provided, however, that a Person will not be deemed the "Beneficial
Owner" of, or to "beneficially own," any security under this subparagraph (i) as
a result of an agreement, arrangement or understanding to vote that security if
that agreement, arrangement or understanding:
(A) arises solely from a
revocable proxy or consent given in response to a public (that