PATTERSON UTI ENERGY INC

Effective August 1, 2022, Section 102(b)(7) of the Delaware General Corporation Law (“DGCL”) was amended to permit a Delaware corporation to adopt a provision in its certificate of incorporation to eliminate or limit monetary liability of certain senior corporate officers for breach of the fiduciary duty of care in certain actions. Previously, the DGCL allowed only exculpation of corporate directors for breach of the fiduciary duty of care.

Article Ninth of Patterson-UTI's Restated Certificate of Incorporation currently provides for Patterson-UTI to limit the monetary liability of directors in certain circumstances pursuant to and consistent with Section 102(b)(7) of the DGCL, but does not include a provision that allows for the exculpation of officers. Subject to the approval of the stockholders, the Board has approved a proposal to amend our Restated Certificate of Incorporation (the “Amendment”) to provide for the elimination or limitation of monetary liability of specified executive officers of the Company for breach of the duty of care in certain actions and recommends that stockholders approve such Amendment. The proposed Amendment would allow for the exculpation of certain officers only in connection with direct claims brought by stockholders, including class actions, but would not eliminate officers’ monetary liability for breach of fiduciary duty claims brought by the Company itself or for derivative claims brought by stockholders in the name of the Company. As is currently the case with directors under our Restated Certificate of Incorporation, the Amendment would not limit the liability of officers for any breach of the duty of loyalty to the Company or its stockholders, any acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of the law and any transaction from which the officer derived an improper personal benefit.

If adopted by the stockholders, the Amendment would become effective upon filing of an appropriate certificate of amendment with the Secretary of State of the State of Delaware. The proposed Amendment would replace Article NINTH of the Restated Certificate of Incorporation with the following language:

“To the fullest extent permitted by the General Corporation Law of the State of Delaware, as the same exists or may hereafter be amended, a director or officer of the Corporation shall not be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director or officer, as applicable.”

Other than the replacement of the existing Article NINTH by the proposed Article NINTH, the remainder of our Restated Certificate of Incorporation will remain unchanged after effectiveness of the Amendment.

The Board believes that amending our Restated Certificate of Incorporation to add the authorized liability protection for certain officers, consistent with the protection in our Restated Certificate of Incorporation currently afforded our directors, is necessary in order to continue to attract and retain experienced and qualified officers. The nature of the role of directors and officers often requires them to make decisions on crucial matters. Frequently, directors and officers must make decisions in response to time-sensitive opportunities and challenges, which can create substantial risk of investigations, claims, actions, suits or proceedings seeking to impose liability on the basis of hindsight, especially in the current litigious environment and regardless of merit. Limiting concern about personal risk would empower both directors and officers to best exercise their business judgment in furtherance of stockholder interests. To the extent our peers adopt exculpation clauses that limit the personal liability of officers in their certificates of incorporation, failing to adopt the Amendment could impact our recruitment and retention of exceptional officer candidates that conclude that the potential exposure to liabilities, costs of defense and other risks of proceedings exceeds the benefits of serving as an officer of the Company.

The Board of Directors recommends a vote “FOR” the approval of the Amendment. Approval of the proposal requires the affirmative vote of the holders of a majority of the outstanding shares of Common Stock entitled to vote at the Meeting. Unless you give contrary instructions in your proxy, your properly submitted proxy will be voted “FOR” approval of the proposal. Abstentions and broker non-votes will have the same effect as a vote “AGAINST” the proposal. Brokerage firms, banks, broker-dealers, and other similar organizations do not have authority to vote on this proposal without instructions from the beneficial owner.