Document:

<PAGE>

                                                               EXECUTION VERSION

EXHIBIT 10.4

                 FIFTH AMENDMENT TO AMENDED AND RESTATED BINDING
                                   TERM SHEET

      This FIFTH AMENDMENT TO AMENDED AND RESTATED BINDING TERM SHEET (this
"AMENDMENT") is made effective as of June 16, 2005 by and between NORTHWEST
BIOTHERAPEUTICS, INC., a Delaware corporation (the "COMPANY"), and TOUCAN
CAPITAL FUND II, L.P., a Delaware limited partnership ("TOUCAN").

                                    RECITALS

      WHEREAS, the Company and Toucan are party to that certain Binding
Convertible Preferred Stock Term Sheet originally dated April 26, 2004 and
amended and restated on October 22, 2004 as further amended on December 27,
2004, January 26, 2005, April 12, 2005 and May 13, 2005 (the "CONVERTIBLE
PREFERRED STOCK TERM SHEET").

      WHEREAS, concurrently herewith, the Company and its affiliates, if any,
and Toucan and its designees, are entering into Amendment No. 7 (the "SEVENTH
AMENDMENT") to that certain Amended and Restated Recapitalization Agreement by
and between the parties thereto; and

      WHEREAS, in connection with the Seventh Amendment, the Company and Toucan
desire to amend the Convertible Preferred Stock Term Sheet as provided herein.

                                    AGREEMENT

      NOW, THEREFORE, for and in consideration of good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Company and Toucan agree as follows:

      1. The paragraph of the Convertible Preferred Stock Term Sheet entitled
"Warrants:" is hereby amended and restated in its entirety as follows:

      "The Company shall issue $5.35 million in warrant coverage on the first
      $5.35 million Convertible Preferred Stock purchased for cash (the
      "Preferred Stock Warrants"). Preferred Stock Warrants shall not be issued
      upon conversion of notes, exercise of warrants, or other conversion or
      exercise. The number of warrants to be so issued shall be determined on
      the basis of $0.10 per share. If the total of $5.35 million is invested in
      Convertible Preferred Stock, the number of warrants issued shall be
      exercisable for 53.5 million shares of Convertible Preferred Stock. The
      exercise price of such Preferred Stock Warrants shall be $.04 per share
      (subject to adjustment for stock splits, stock dividends and the like).
      The exercise period shall commence upon issuance of the Preferred Stock
      Warrants, and shall continue for a period of seven (7) years after their
      respective

<PAGE>

                                                               EXECUTION VERSION
      issuance dates."

      2. Unless specifically modified or changed by the terms of this Amendment,
all terms and conditions of the Convertible Preferred Stock Term Sheet shall
remain in effect and shall apply fully as described and set forth in the
Convertible Preferred Stock Term Sheet.

      3. This Amendment may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

                  [REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]

                                       2.
<PAGE>

                                                               EXECUTION VERSION

      The Company and Toucan have executed this FIFTH AMENDMENT TO AMENDED AND
RESTATED BINDING TERM SHEET as of the day and year first written above.

TOUCAN CAPITAL FUND II, L.P.                NORTHWEST BIOTHERAPEUTICS, INC.

By:___________________________________      By:_________________________________
Name:  Linda Powers                         Name:  Alton L. Boynton
Title: Managing Director                    Title: President

                                       3.exv10w1

 

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.

1

 

     
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

2

 

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

3

 

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

4

 

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.

5

 

     
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.

6

 

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

7

 

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

8

 

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

9

 

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

10

 

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

11

 

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.

12

 

     
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

13

 

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.

14

 

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

-1-

 

	 	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

-2-

 

	 	 	 	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

-3-

 

	 	 	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

-4-

 

	 	 	 	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-

 

	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-

 

	 	 	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-

 

     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.:  	 

 

 

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:
	 	 
	 
	 

 

 

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

 

	 	(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

 

	 	 	 	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

 

	 	 	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

 

	 	 	 	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

 

	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

 

	 	 	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]

7

 

     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

 

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:
	 
	 	 
	

	 	

 

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

-1-

 

	 	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.

-2-

 

	 	(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-

 

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-

 

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-

 

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]

-6-

 

     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.:	 	 
	

	 	 	 	 

-7-

 

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:	 	 
	

	 	 	 	 

-8-

 

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

 

	 	(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

 

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

3

 

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.

4

 

	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.

5

 

	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.

6

 

	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]

7

 

     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:	 	 
	 
	 	 	 	 
	 
	 	 
	 
	 	 	 	 
	

	 	 	 	

8

 

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:
	 
	 	 
	 

	 	 

9

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00086-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00086-of-00352.parquet"}]]