Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On January 1, 2023, Patterson-UTI Energy, Inc. ("Patterson-UTI") appointed James
M. Holcomb, 60, as the Chief Operating Officer of Patterson-UTI. Mr. Holcomb
joined Patterson-UTI in February 1998 with the acquisition of Robertson Onshore
Drilling Company, and since that time has served in numerous operational
management roles, including as President of Patterson-UTI Drilling Company LLC,
a wholly owned subsidiary of Patterson-UTI, since January 2012, and as Senior
Vice President of Operations of Patterson-UTI Drilling Company LLC from April
2006 to January 2012. Mr. Holcomb has over 35 years of experience in contract
drilling operations. Mr. Holcomb holds a Bachelor of Science Degree in Business
Management from LeTourneau University.
Concurrently with Mr. Holcomb's appointment as Chief Operating Officer, Mr.
Holcomb's previous employment agreement with Patterson-UTI Drilling Company LLC
was superseded by a new employment agreement with Patterson-UTI (the "Employment
Agreement"). Pursuant to the Employment Agreement, Mr. Holcomb will receive a
base salary of $500,000 per year and will be eligible to participate in
Patterson-UTI's annual bonus arrangements, in all benefit plans generally
available to other employees and in Patterson-UTI's incentive plans.
The Employment Agreement has an initial three-year term, subject to automatic
annual renewal thereafter. Mr. Holcomb may terminate his employment under his
Employment Agreement by providing written notice of such termination at least 30
days before the effective date of such termination. Under specified
circumstances, Patterson-UTI may terminate Mr. Holcomb's employment under his
Employment Agreement for "Cause" (as defined in the Employment Agreement) by
either (i) providing written notice ten days before the effective date of such
termination and by granting at least ten days to cure the cause for such
termination or (ii) by providing written notice of such termination at least 30
days before the effective date of such termination and by granting at least 20
days to cure the cause for such termination; provided that if the matter is
reasonably determined by Patterson-UTI to not be capable of being cured, Mr.
Holcomb may be terminated for cause on the date the written notice is delivered.
The Employment Agreement also provides for, among other things, severance
payments following termination by Patterson-UTI of Mr. Holcomb other than for
Cause, or termination by Mr. Holcomb for "Good Reason" (as defined in the
Employment Agreement). Under these provisions, if Mr. Holcomb's employment is
terminated by Patterson-UTI without Cause, or Mr. Holcomb terminates his
employment for Good Reason, (i) Mr. Holcomb will have the right to receive a
lump-sum payment consisting of 2.5 times the sum of (x) his base salary and (y)
the average annual cash bonus received by him for the three years prior to the
date of termination, (ii) Mr. Holcomb will have the right to receive a pro-rated
lump-sum payment equal to his annual cash bonus based on actual results for the
year, payable at the same time as annual cash bonuses are paid to active
employees, (iii) Patterson-UTI will accelerate vesting of all time-based equity,
phantom equity and long-term cash incentive awards on the 60th day following Mr.
Holcomb's termination, (iv) Patterson-UTI will cause all performance-based
equity, phantom equity and long-term cash incentive awards to continue in effect
through the end of the applicable performance period and vest based on actual
results as if Mr. Holcomb had remained employed through the end of the
applicable performance period and (v) Patterson-UTI will pay Mr. Holcomb certain
accrued obligations and certain obligations pursuant to the terms of employee
benefit plans. However, if a termination by Patterson-UTI other than for Cause
or by Mr. Holcomb for Good Reason occurs following a "Change in Control" (as
defined in his Employment Agreement), Mr. Holcomb will generally be entitled to
the same severance payments and benefits described above except that (i) the
pro-rated lump-sum payment for annual cash bonuses will be based on Mr.
Holcomb's highest annual cash bonus for the last three years, (ii) Mr. Holcomb
will be entitled to 30 months of subsidized benefits continuation coverage and
(iii) the performance-based equity, phantom equity and long-term cash incentive
awards will be accelerated based on the target level of performance on the 60th
day following Mr. Holcomb's termination.
All of the foregoing severance benefits (other than the accrued obligations and
benefit obligations) are conditioned on Mr. Holcomb's execution of a release
within 50 days of his termination that is not revoked during any applicable
revocation period provided in such release.
The Employment Agreement also contains a non-disparagement covenant and certain
confidentiality covenants prohibiting Mr. Holcomb from, among other things,
disclosing confidential information. The Employment Agreement also contains
non-competition and non-solicitation restrictions, pursuant to which Mr. Holcomb
will not be permitted to compete with Patterson-UTI in certain circumstances for
a period of one year following termination of employment.
In connection with Mr. Holcomb's appointment as the Patterson-UTI's Chief
Operating Officer, the Compensation Committee of Patterson-UTI's Board of
Directors modified the target bonus for Mr. Holcomb's 2022 short-term, annual
cash incentive plan award to be 100% of his new base salary and approved Mr.
Holcomb's long-term incentive plan annual target award value for 2023 to be $1.5
million.
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The foregoing summary does not purport to be complete and is qualified in its
entirety by reference to the Employment Agreement, a copy of which is filed as
Exhibit 10.1.
Item 7.01 Regulation FD Disclosure.
On January 3, 2023, Patterson-UTI announced the appointment of Mr. Holcomb as
Chief Operating Officer, effective January 1, 2023. A copy of the press release
is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
The information provided in this Item 7.01 (including the exhibit referenced
herein) shall be deemed "furnished" and shall not be deemed "filed" for the
purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange
Act"), nor shall it be incorporated by reference in any filing made by
Patterson-UTI pursuant to the Securities Act of 1933 or the Exchange Act, except
to the extent that such filing incorporates by reference any or all of such
information by express reference thereto.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Employment Agreement, dated as of January 1, 2023, between Patterson-UTI
10.1 Energy, Inc. and James M. Holcomb.
Press Release, dated January 3, 2023, announcing the appointment of James
99.1 M. Holcomb as Chief Operating Officer.
Cover Page Interactive Data File (embedded within the Inline XBRL
104 document).
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