Document:

Exhibit 10.6

 

ADVISORY SERVICES AGREEMENT

 

THIS ADVISORY SERVICES AGREEMENT (the “Agreement”), is made and entered into as of the 19th day of February, 2015, but effective the 4th day of March, 2015 (the “Effective Date”), by and between HELMERICH & PAYNE, INC. (the “Company”) and Steven R. Mackey (“Mackey”).

 

W I T N E S S E T H:

 

WHEREAS, Mackey possesses expertise and experience with regard to the Company’s businesses;

 

WHEREAS, Mackey has agreed to provide certain advisory services to the Company and to receive payment therefor pursuant to this Agreement.

 

NOW, THEREFORE, in consideration of the mutual covenants herein, the parties agree as follows:

 

1.                                      Term.  The term of this Agreement shall be March 4, 2015 to February 28, 2016 (the “Term”) unless terminated earlier as provided herein.

 

2.                                      Services.  During the Term of this Agreement, Mackey shall provide advice and counsel on those matters identified by the Company’s Chairman of the Board of Directors.  It is anticipated that Mr. Mackey shall provide advice on real estate and general corporate matters.  It is estimated that Mackey will provide approximately 35 hours of services to the Company per month.  Mackey shall not be prevented from engaging in other consulting projects or endeavors which are not in direct conflict with the business of the Company or its subsidiaries or his duties under this Agreement.

 

3.                                      Fee.

 

(a)         In consideration for the performance of the services described in Section 2 hereof, during the Term, Mackey shall be paid a monthly fee of $20,833.33.

 

(b)         Expenses.  Mackey shall be entitled to receive reimbursement for all reasonable business and travel expenses incurred for the benefit of the Company (including first class travel for international air flights), all under and in accordance with the policies, practices and procedures of the Company as approved and interpreted by the Chairman of the Board of Directors.

 

4.                                      Independent Contractor.  Mackey is retained by the Company as an independent contractor and not as an “agent” or “employee” of the Company.  During the Term of this Agreement, Mackey shall hold himself out as an independent contractor and not as an “agent” or “employee” of the Company.  Accordingly, the Company will not provide nor will it be responsible to pay for, wages or benefits to Mackey pursuant to this Agreement.  Further, Mackey shall be responsible for withholding of applicable federal and state income tax and such other insurance and payroll deductions as required by law.  Mackey is responsible, where necessary, to secure at his sole

 

 

cost, worker’s compensation insurance, disability benefits or any other insurance as may be required by law.

 

5.                                      Indemnity.  The Company shall defend, indemnify and hold harmless Mackey against and in respect of any and all damages, claims, losses, expenses, costs, obligations and liabilities (including reasonable attorney’s fees) incident to any suit, action, investigation, claim or proceeding which Mackey may incur or may suffer as a direct result of providing services pursuant to this Agreement; provided, that the foregoing indemnification shall not include or apply to any loss or liability arising out of any act or omission of Mackey which resulted from his fraud, gross negligence or willful misconduct or breach or default under this Agreement.

 

6.                                      Compliance with Applicable Laws.  During the Term of this Agreement, Mackey will comply with all applicable laws, rules and regulations with regard to his performance of services hereunder.

 

7.                                      Termination.

 

(a)                                 Expiration.  This Agreement shall terminate, without further action of the parties hereto, upon the expiration of the Term as provided in Section 1.

 

(b)                                 Early Termination.  Either party can terminate this Agreement at any time for any reason upon 60 days prior written notice to the other party.

 

(c)                                  Death or Disability.  This Agreement will immediately terminate upon the death or disability of Mackey.

 

8.                                      Obligations of Company Upon Termination.  If this Agreement is terminated as provided in Section 7 above, then this Agreement shall terminate without further obligation to Mackey, other than those obligations accrued or earned by Mackey as of the date of termination.  In the event of termination, Mackey shall return all property of Company within thirty (30) days of termination.

 

9.                                      Confidentiality.  All information received by Mackey regarding the Company including its business, operations, trade secrets or assets shall be confidential and shall not be disclosed to any third party except as specifically required for Mackey to perform his services under this Agreement.

 

10.                               Successors and Binding Effect.

 

(a)                                 Assignment.  This Agreement shall not be assignable by either party without prior written consent of the other party.

 

(b)                                 Binding Effect.  This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective personal or legal representatives, executors, administrators and successors.

 

 

11.                               Miscellaneous.

 

(a)                                 Construction.  This Agreement shall be interpreted, construed and enforced in accordance with the laws of the State of Oklahoma.

 

(b)                                 Headings.  The captions of this Agreement are not part of the provisions hereof and shall have no force and effect.

 

(c)                                  Amendment.  This Agreement may not be amended or modified except by a written agreement executed by the parties hereto or their respective successors, assigns or the legal representatives as the case may be.

 

(d)                                 Notices.  All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid.  Notices and communications shall be effective when actually received by the addressee unless otherwise specifically provided in this Agreement.

 

(e)                                  Severability.  The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provisions of this Agreement.

 

(f)                                   No Waiver.  The failure of either party to insist upon strict compliance with any provision hereof shall not be deemed to be a waiver of such provision or any other provision hereof.

 

(g)                                  Entire Agreement.  This Agreement contains the entire understanding of the Company and Mackey with respect to the subject matter hereof.

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date and year first above written.

 

 

	
 
    	
HELMERICH &   PAYNE, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
/s/   JOHN W. LINDSAY
    
	
 
    	
 
    	
JOHN   W. LINDSAY
    
	
 
    	
 
    	
CHIEF   EXECUTIVE OFFICER
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/   STEVEN R. MACKEY
    
	
 
    	
STEVEN   R. MACKEYExhibit 10.7

 

Helmerich & Payne, Inc.

Annual Bonus Plan for Executive Officers

 

Overview

 

Annual bonus awards are available to certain executive officers to recognize and reward desired performance.  Each year the Human Resources Committee (the “Committee”) reviews and makes any desired changes to the participants, the performance measures, and the specific financial and strategic objectives.  An executive officer’s bonus award opportunity is determined primarily by the individual’s position and level of responsibility.

 

Participation

 

The participants in the Plan are H&P’s executive management team, which includes

 

·                  John Lindsay

·                  Juan Pablo Tardio

·                  John Bell

·                  Gordon Helm

·                  Cara Hair

 

Bonus Award Opportunity

 

Participants are assigned target bonus awards expressed as percentages of base salary.  These bonus awards are earned when performance objectives are achieved.  The award percentages are as follows:

 

	
 
    	
 
    	
Threshold
    	
 
    	
Target
    	
 
    	
Reach
    	
 
    
	
John Lindsay
    	
 
    	
40
    	
%
    	
100
    	
%
    	
130
    	
%
    
	
Juan Pablo Tardio
    	
 
    	
25
    	
%
    	
75
    	
%
    	
100
    	
%
    
	
John Bell
    	
 
    	
20
    	
%
    	
60
    	
%
    	
100
    	
%
    
	
Gordon Helm
    	
 
    	
20
    	
%
    	
60
    	
%
    	
100
    	
%
    
	
Cara Hair
    	
 
    	
20
    	
%
    	
60
    	
%
    	
100
    	
%
    

 

Financial Performance Objectives

 

The financial performance objectives selected align management with shareholders.  When these objectives are met, shareholders will realize greater value in their Company ownership.  A participant’s bonus award will be based upon three disproportionately weighted financial measures being:

 

	
Financial Measure
    	
 
    	
Weighting
    	
 
    
	
Earnings Per Share
    	
 
    	
35
    	
%
    
	
Return on Invested Capital
    	
 
    	
35
    	
%
    
	
Operating EBITDA
    	
 
    	
30
    	
%
    

 

The Board of Directors, at its September quarterly meeting, annually approves an operating and capital budget for the following fiscal year.  Each financial measure is then assigned threshold, target and reach objectives based upon this approved budget.  The target objectives are set according to the approved operating budget, with threshold and reach objectives adjusted 30% below and 30% above the target objectives.  After the end of the fiscal year, actual financial results are then compared to the predetermined objectives for each of the financial measures to determine the amount of any bonus.  In the event actual financial results fall between the threshold and target or the target and reach objectives, then the bonus shall be proportionately increased as a result of the threshold or target objectives being exceeded.

 

 

Strategic Performance Objectives

 

The bonus, if any, derived from the Company’s financial performance may then be increased or decreased by a maximum of 100% as determined by the Committee (“adjustment factor”).  Eighty percent of this adjustment factor is based upon the Committee’s subjective evaluation of the Company’s total shareholder return relative to an industry peer group.  The remaining 20% of this adjustment factor is based upon the Committee’s subjective evaluation of the Company’s goals of continued industry leading safety performance and attaining higher than industry average utilization and premium day rates.

 

Negative Discretion

 

Notwithstanding the provisions of this Annual Bonus Plan for Executive Officers, the Committee shall have the right to reduce or eliminate any bonus otherwise due under this Plan based upon its subjective determination of individual performance.

 

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