PTEN Patterson UTI Energy Inc

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

The Patterson-UTI Energy, Inc. 2014 Long-Term Incentive Plan was originally approved by the stockholders of Patterson-UTI Energy, Inc. (the “Company”) effective as of April 17, 2014, and the amendment and restatement of the plan (the “Amended and Restated Plan”) was approved by the Company’s stockholders effective as of June 29, 2017. On April 10, 2019, subject to the approval of the Company’s stockholders, the Board of Directors of the Company approved an amendment to the Amended and Restated Plan to increase the number of shares available for issuance under the plan by 9.5 million shares and to extend the latest date on which awards may be granted under the Amended and Restated Plan to June 6, 2029 (the “Amendment” and the Amended and Restated Plan, as amended by the Amendment, the “Plan”).

On June 6, 2019, the Company’s stockholders approved the Amendment.  The Plan provides for the granting of incentive and non-incentive stock options, stock appreciation rights (“SARs”), restricted stock awards, other stock unit awards, performance shares, performance units and dividend equivalents. With respect to awards to participants other than directors, the Plan is administered by the Compensation Committee of the Company’s Board of Directors, which comprises exclusively non-employee independent directors. With respect to awards to directors, the Plan is administered by the Board of Directors.

Subject to adjustment in the event of certain corporate transactions, the aggregate number of shares of Common Stock authorized for grant under the Plan, as amended by the Amendment, is 28.4 million, which includes the 18.9 million shares previously authorized under the Amended and Restated Plan. After giving effect to the increase included in the Amendment and assuming a target payout of all performance units currently outstanding, approximately 9.7 million shares remain available for grant under the Plan as of June 6, 2019.  Shares that are subject to options or SARs count as one share of Common Stock against this aggregate limit. Shares that are subject to awards other than options and SARs count as two shares of Common Stock against this aggregate limit. Generally, if an award granted under the Plan or the existing equity plans of the Company expires, is forfeited, is settled in cash or otherwise terminates without the issuance of all or a portion of the shares of Common Stock subject to the award, the shares allocable to the expired, forfeited, cash settled, or terminated portion of the award will be available for awards again under the Plan. Any shares of Common Stock that again become available for grant under the Plan will be added back as one share if the shares were subject to options or SARs, and as two shares if the shares were subject to awards other than options or SARs.

Subject to adjustment in the event of certain corporate transactions, under the Plan, no participant may be granted options or SARs during any calendar year with respect to more than 1,000,000 shares or restricted stock, performance awards denominated in shares and/or other stock unit awards that are denominated in shares in any calendar year with respect to more than 500,000 shares. In addition to the foregoing limits, the maximum dollar value payable to any participant with respect to performance awards denominated in cash in respect of any calendar year is $5,000,000. Any award will only be subject to one of the applicable per person limits set forth in the previous sentence. No director may be granted during any calendar year awards having a fair value determined on the date of grant that, when added to other fees paid in cash for such year, exceeds $500,000.

The foregoing description of the Plan is qualified in its entirety by reference to the text of the Plan, which is included as Exhibit 10.1 hereto.